Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View More
US Dollar Technical Analysis for the Days Ahead

US Dollar Technical Analysis for the Days Ahead

Paul Robinson, Strategist

USD Technical Outlook

  • US Dollar Index (DXY) reversed sharply lower on Friday
  • Looking for momentum to continue to the downside
  • Still a tough counter-trend trade as it has really only moved sideways the past month

USD Forecast
USD Forecast
Recommended by Paul Robinson
Get Your Free USD Forecast
Get My Guide

US Dollar Technical Analysis for the Days Ahead

The DXY has weakened a bit since topping around a long-term slope. Friday’s sharp reversal lower further suggests it wants to roll over, but it has been a relatively difficult trade given the index is still trading roughly around the same levels from a month ago.

Friday’s sharp sell-off should bring in some more momentum this week if we are to see further weakening out of the dollar. There is a trend-line it is trying to hang onto rising up from early August, perhaps a firm break below will indicate it is about to get rolling downhill.

The first level of support I will be watching is right around 110, the current monthly low. A hold of that level could bring in further consolidation out of the DXY as it starts to digest its strength so far this year through a time correction versus an outright price correction.

However, a breakdown below 110 could bring into play a slope from February and the high prior to the last meaningful correction in July. Things appear to be pointing towards a larger move lower with the bond market showing signs that it may have finally or very near reached a point of capitulation.

Rates appear to be the hold-out here, so it will be important to get them turning around if the dollar trade lower is to pick up momentum. First the dollar topped in late September, then stocks bottomed out on CPI not long ago, bonds look like they will need to post a low to get the macro picture to a turn a bit and support dollar weakness.

The Fundamentals of Trend Trading
The Fundamentals of Trend Trading
Recommended by Paul Robinson
The Fundamentals of Trend Trading
Get My Guide

US Dollar Index (DXY) Weekly Chart

Graphical user interface, chart  Description automatically generated

US Dollar Index (DXY) Daily Chart

Chart, histogram  Description automatically generated

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

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES