US Dollar Weekly Price Outlook: Rally at Multi-year Trend Resistance
- Weekly technicals on the US Dollar Index (DXY)- rally vulnerable into slope resistance
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The US Dollar Index rallied through the yearly opening-range highs with price now testing a critical resistance range around the 98-handle. Here are the key targets & invalidation levels that matter on the DXY weekly chart heading into the close of the month.
DXY Weekly Price Chart
Notes:In my previous US DollarWeekly Technical Outlook we noted that the index was testing key resistance targets into the yearly highs with a breach / close above the 61.8% retracement of the 2017 decline at, “at 97.87 needed to fuel the next leg higher in the Dollar.” Note that a parallel of the 2011 trendline (red) rests just higher. A topside breach this week registered a high at 98.33 before pulling back with price struggling around this key trendline ahead of the New York close on Friday. A weekly RSI resistance trigger is also being challenged here– watch the weekly close.
Weakness beyond 97.87 into the close would leave the immediate advance vulnerable- initial support rests with the 2018 high-week close at 97.42 with broader bullish invalidation steady at 95.66. A topside breach from here keeps the focus on the highlighted trendline confluence around 99.30s.
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Bottom line:The US Dollar Index has broken above the yearly opening-range and while the broader outlook remains weighted to the topside, the immediate advance may be vulnerable IF prices fail to close the week above the 2011 parallel. From a trading standpoint, a good spot to lower long-exposure / raise protective stops. Look for exhaustion ahead of 97.42 on a pullback for support with a breach /close above this resistance zone needed to mark resumption of the broader uptrend.
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--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.