Jump to content

US Dollar Technical Analysis: New Cycle Highs Around the Bend


Recommended Posts

USD Technical Outlook

  • US Dollar Index (DXY) poised for a breakout this week
  • Eventful week with FOMC as the big potential mover

US Dollar Technical Analysis: New Cycle Highs Around the Bend

US Dollar Technical Analysis: New Cycle Highs Around the Bend

 

The US Dollar Index (DXY) has been treading water the past few days following the CPI print last Tuesday that sent markets into scramble mode. This week we have FOMC as the big headline event, with BoJ and BoE following within the same 24-hour period.

 

From a technical standpoint, the trend is up and the Dollar index appears poised to break above the recent high at 110.78. Whether that happens pre or post Fed is of course to be seen. In any event it is going to take a lot of turn the trend around, but we could see the DXY weaken near-term before higher.

 

If this is the case in the very near-term keep the bottom of the recent rage at 109.27 in focus as the first line of support. The index is digesting nicely around the July high at 109.29. A small breakdown could put in an order for a potential validation of the budding trend-line off the August low.

 

If a real bout of selling comes in then look to the low prior to CPI at 107.68. It appears unlikely we see that level anytime soon, but it can’t be ruled out given the explosive moves we have seen around the Fed.

 

Seasonality for stocks, which is applicable to the dollar given the inverse relationship, is at the weakest point right now, so this would suggest a dollar tailwind. The thinking is that we will see a new cycle low in stocks next month and perhaps a tradable low.

 

With the above in mind, this would mean the dollar is likely to stay bid for a bit longer before any kind of meaningful correction can develop.

US Dollar Index (DXY) Daily Chart

DXY_2022-09-19_08-44-18.png

DXY Chart by TradingView

 

 

Sep 19, 2022 | DailyFX
Paul Robinson, Strategist

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
      21,595
    • Total Posts
      91,791
    • Total Members
      41,856
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    peret
    Joined 20/03/23 15:09
  • Posts

    • Dow Jones Index (#US30): Key Levels to Watch This Week   Here is my latest structure analysis and key levels to watch this week on ⚠️Dow Jones.   Support 1: 31420 - 31830 area Support 2: 30690 - 30900 area Support 3: 30070 - 30360 area   Resistance 1: 32250 - 32610 area Resistance 2: 33430 - 33660 area   The market is currently stuck between Support 1 & Support 2. The market participants are awaiting the interest rate decision on Wednesday. It will most likely clarify the future direction of the market with a breakout.   Consider the underlined structures for pullback/breakout trading.
    • I used to enjoy playing poker and blackjack at casinos, but my love for gambling turned into an addiction when I started losing more often than winning. It took hitting rock bottom for me to seek help and change my habits. I joined a support group and worked with a therapist to develop healthier habits. Now, I still go to casinos, but I do so with caution and moderation, setting strict limits and avoiding addictive games. I've learned to control my impulses and make smarter decisions when it comes to my finances.
    • Hi @MayorofBelsize and All,  After checking with the relevant team, the integration will be finalized to mid year. It will be a staggered launch so not all countries will get access at the same time. We will confirm the details of the integration and the date by email to all our clients. We apologize for the delay and inconvenience.  All the best, OfentseIG
×
×
  • Create New...