Chart of the Day - Wednesday, August 3, 2023

Today's Chart of the Day was shared by Brian Joyce (@Nasdaqbjoyce). The Dollar Index ($DXY) is at a crossroads again, and the next move for stocks could hinge on the path it takes. $DXY broke down to a 15-month low three weeks ago, after violating the February/April lows, around $101. However, that breakdown is failing as it's back above the prior lows. It snapped a five-day winning streak today, but it fell just -0.10%. Brian points out that today's flattish price action created a Doji candle at a confluence of resistance from two downward-sloping trendlines. Doji candles represent a brief moment of equilibrium between buyers and sellers before an eventual imbalance. If $DXY resolves higher, it would likely put pressure on stocks, while an inflection lower could act as a tailwind.