DXY Support, Short-term Pattern in Focus


USD Technical Outlook:

  • US Dollar Index (DXY) is coming off pattern help however might fail
  • Watching wedge sample on 4-hr chart creating off help

US Dollar Technical Analysis: DXY Bounce at Risk of Failure

Last week the DXY got here off help reasonably strongly, however proper after doing so the value motion instantly grew to become uneven. The bounce from help is nice to date, however we are able to’t rule out the likelihood it is just simply that – a bounce throughout the context of a bigger corrective sequence.

The previous few classes are bringing into focus a wedge on the 4-hr chart, and with it occurring inside a downtrend off the July excessive it might result in one other leg decrease. It in fact might find yourself triggering larger as effectively. A day or two extra of filling out the sample will assist deliver readability.

Should we see the draw back set off and the trend-line from the tip of March fail, final week’s low which occurred on the May excessive of 105 will grow to be crucial for the near-term outlook. A sustained break beneath 105 will shift the main target in the direction of a bigger correction in the USD rally.

The subsequent degree of help to take a look at on a drop beneath help clocks in at 10342, a swing low created throughout June. Beneath there it’s important to go all the way down to round 10130 to search out strong help.

But earlier than trying on the draw back situation we should always proceed to respect help till damaged. In the occasion we see the DXY squeeze larger (>106.93) then a crossing of latest resistance round 10742 may have the index trying on the July excessive at 10929.

US Dollar Index (DXY) Daily Chart

US Dollar Index (DXY) 4-hr Chart

dxy 4hr chart

DXY Charts by TradingView

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—Written by Paul Robinson, Market Analyst

You can comply with Paul on Twitter at@PaulRobinsonFX

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