Jump to content

USD Technical Analysis: DXY Outlook in the Days Ahead


Recommended Posts

USD TECHNICAL OUTLOOK

  • US Dollar Index (DXY) continues to slide after trend extreme
  • Currently trading around a level that may provide support
Rupee hits record low of 69.61 per USD

USD TECHNICAL ANALYSIS: DXY OUTLOOK IN THE DAYS AHEAD

The US Dollar Index (DXY) is continuing its recent run of weakness as it pulls back sharply from recent highs. The extremes in bullish sentiment suggested the dollar needed to cool off, and so the recent slide isn’t surprising.

The question is, is whether the USD can reassert its bullish ways quickly, or if it will need some time to digest the run before continuing higher. It’s also possible we are seeing a larger reversal, but at this time that appears to have a lower probability than an eventual trend continuation.

In any event, the DXY is trading around its first level of support via a swing low created on May 5 at 102.35. This is below the trend-line extending higher from the late March low, but even though the trend-line has been broken it doesn’t mean we will necessarily see further weakness.

However, if we see the DXY closes on a daily basis below price support then look for weakness to continue with the 102.35 level turning into a potential source of resistance. The next level up could be the backside test of a 20-year trend-line down near 101, but conviction is lacking in that acting as support until we see the DXY trade around it and show bullish price action.

If support at hand can hold and the DXY pushes higher here, then we may be in for a rangebound period of trading that would do the USD some good in terms of building a base for another run higher. Given the big move and extreme bullishness recently surrounding the dollar a little time would do it some good.

US DOLLAR INDEX (DXY) DAILY CHART

DXY daily chart

DXY Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst. DailyFX  | 23rd May 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,264
    • Total Posts
      90,875
    • Total Members
      41,377
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Adam50
    Joined 06/02/23 08:09
  • Posts

    • Asian equities suffered their worst day in three months overnight, retreating on a broad front as markets reacted to the impressive US NFP reading last week. The huge number of jobs created, and the lowest unemployment level in over half a century poured cold water on the idea that the Fed would pause its hiking efforts, although expectations for the terminal rate only ticked up to 5% from 4.9%. In the UK the FTSE 100 remains close to its new record high, continuing its strong run versus other indices. Oil prices have edged higher after hitting a four-week low on Friday in the wake of the NFP report, but this appears to be a brief respite. A quiet start to the week sees just the Canadian Ivey PMI on the calendar of notable events.  
    • For more up to date news on how markets will open, the latest earnings and economic news, watch IGTV live in the platform at 07:30am UK. Today’s coverage: Indices: Europe expected down today after FT100 record on Friday. Techs biggest decliners on Wall St FX: USD holds recent gains after very strong NFP data on Friday. Traders working out this week’s direction. UK GDP on Friday possibly the big data of the week  Equities: Earnings begin to slow down…this week DIS & UBER the big ones Commods: Gold up after 2 heafty days of declines          
    • Elliott Wave Analysis TradingLounge Daily Chart, 6 February 23, AAVE /U.S.dollar(AAVEUSD) AAVEUSD Elliott Wave Technical Analysis Function: Counter trend Mode: Motive Structure: Impulse Position: Wave ((2)) Direction Next higher Degrees: Wave III of Motive Wave Cancel invalid Level: 50.173 AAVE /U.S.dollar(AAVEUSD)Trading Strategy: AAVE token has recovered well from the 50.40 level and managed to cross the MA200 line, indicating that an uptrend is forming. The Elliottwave structure is in a correction of wave (2) as a short-term decline before the price rises. again AAVE /U.S.dollar(AAVEUSD) Technical Indicators: The price is above the MA200 indicating an uptrend. The wave oscillators above Zero-Line momentum are bullish TradingLounge Analyst: Kittiampon Somboonsod Elliott Wave Analysis TradingLounge 4H Chart, 6 February 23, AAVE /U.S.dollar(AAVEUSD) AAVEUSD Elliott Wave Technical Analysis Function: Counter trend Mode: Motive Structure: Impulse Position: Wave ((2)) Direction Next higher Degrees: Wave III of Motive Wave Cancel invalid Level: 50.173 AAVE /U.S.dollar(AAVEUSD) Trading Strategy: AAVE token has recovered well from the 50.40 level and managed to cross the MA200 line, indicating that an uptrend is forming. The Elliottwave structure is in a correction of wave (2) as a short-term decline before the price rises. again. AAVE /U.S.dollar(AAVEUSD)Technical Indicators: The price is above the MA200, indicating an uptrend. The wave oscillators below Zero-Line Bearish momentum.
×
×
  • Create New...