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In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. The US Dollar is up more than 2% from the September lows with the index now approaching key resistance hurdles early into the start of 4Q trade. Here are the key targets & invalidation levels that matter on the DXY weekly chart.Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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DXY Weekly Price Chart

DXY Price Chart - Dollar Index Weekly

Notes: In last month’s US Dollar Weekly Price Outlook we highlighted a critical support confluence at 93.65/89 where the 2016 low-week close and the 38.2% retracement of the yearly range, “converges on the median-line of the multi-year pitchfork we’ve been tracking off the 2015 / 2017 highs.” Price registered a monthly low at 93.81 before posting a weekly reversal with the index now testing the September highs.

Immediate resistance is eyed at the 200-week moving average, currently around ~95.70s backed by the yearly high-week close / slope resistance at 96.13- a close above this threshold would be needed to keep the long-bias in play with such a scenario targeting parallel resistance (red) / yearly highs at 96.98. Key support still 93.65/89.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: The dollar recovery is targeting initial resistance objectives early in the month / quarter. From a trading standpoint, the immediate focus is on possible price exhaustion on a push higher towards down-slope pitchfork resistance near 96.13and the 2011 parallel at 96.98 – both areas of interest into the start of the month. Keep in mind we’re just now beginning to carve out the October opening range with US Non-Farm Payrolls (NFP) on tap this Friday.

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Relevant US Data Releases

USD Economic Calendar

Economic Calendar– for the latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide!

Previous Weekly Technical Perspectives

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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com