US Dollar Decimated, Now What? USD Technical Outlook
USD Technical Highlights:
- US Dollar Index walloped below support
- May bounce near-term, but still has room to go on downside
US Dollar Index walloped below support
The US Dollar has taken a pounding in recent sessions, with the range thus far this year nearly matching all of last year’s total range. One has to think that with the momentum we are seeing now that it will end up expanding to the downside and break the 2019 low of 95.03. That isn’t a bold call.
The past couple of sessions have brought with them support breaks via both trend-lines and price. Conditions are becoming oversold here, but not the type that look like they are best faded. A bounce could be in the works near-term, and if recent momentum is any signal, it might be a small one before another thrust lower.
Would-be shorts may want to use a small bounce or pause as an opportunity to enter in anticipation of further downside. There are a pair of trend-lines of slightly differing angles rising up from 2011 and 2014 that look like the next material levels of support. These currently clock in just under 94.
Keep an eye on the Euro as it keeps driving higher, it accounts for about 57% of the index. If the levels outlined above are to be seen, a trend-line from 2008 around 11700 could be met. If the DXY and Euro hit these levels, we will reassess. With markets moving as fast as they are, that discussion might happen in the not-too-distant future.
US Dollar Index Daily Chart (smacked below support)
US Dollar Index Weekly Chart (has room to go lower)
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---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.