US Dollar Weekly Price Outlook: DXY Rally at Risk into Yearly Highs
- Updated weekly technicals on the US Dollar Index (DXY); rally vulnerable into 97.87
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The US Dollar Index is trading just below the yearly highs with the advance now targeting a critical long-term Fibonacci resistance confluence just higher. Here are the key targets & invalidation levels that matter on the US Dollar Index (DXY) weekly chart. Review this week's Strategy Webinar for an in-depth breakdown of this setup and more.
DXY Weekly Price Chart
Notes: In my previous US DollarWeekly Technical Outlook we noted that the index was approaching resistance at the 2018, “high-week close a 97.42 with a breach above key resistance at 97.87 needed to fuel the next leg higher in the Dollar.” Price has continued to respect this threshold on a weekly close basis with the greenback trading just below this zone ahead of the New York close on Friday (note the pending RSI resistance trigger in momentum).
Initial weekly support rests with the 200-week moving average at 95.90 and is backed closely by the low-week close at 95.66. Ultimately a break below the 2018 support line / 2019 opening-range lows at 95.03 is needed to suggest a more significant reversal is underway. A topside breach above the key 61.8% retracement at 97.87 exposes subsequent topside objectives at the highlighted trendline confluence around 99.30s.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom line: The US Dollar Index is once again testing BIG resistance into the start of 2Q trade. The immediate advance remains vulnerable while below confluence resistance at 97.87. From a trading standpoint, a good spot to reduce long-exposure / raise protective stops. Looking for possible price exhaustion / reaction on a test higher for guidance- ultimately a close above is needed to keep the long-bias viable targeting slope resistance.
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Relevant US Economic Data Releases
Previous Weekly Technical Charts
- British Pound (GBP/USD)
- Gold (XAU/USD)
- Australian Dollar (AUD/USD)
- New Zealand Dollar (NZD/USD)
- Euro (EUR/USD)
- Crude Oil (WTI)
- Canadian Dollar (USD/CAD)
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.