Dollar Price Outlook: USD Reversal- Relief Rally or Resumption?
US Dollar Technical Price Outlook: DXY Weekly Trade Levels
- US Dollar technical trade level update – Daily & Intraday Charts
- USD marks second consecutive weekly reversal covering half the yearly range
- DXY price recovery vulnerable sub-101.95
The US Dollar surged more than 2.4% this week with DXY trading at 100.79 ahead of New York close on Friday. The rally comes on the back of the largest weekly decline in more than ten years with the index posting ranges of 2% or more for the fifth consecutive week. Back to back weekly swings of this scale have clouded the technical picture with the Coronavirus headlines adding even more uncertainty. That said, the recent recovery remains vulnerable in the days ahead and our focus is on near-term resistance levels just higher. These are the updated technical targets and invalidation levels that matter on the US Dollar Index (DXY) weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of this US Dollar trade setups and more.
US Dollar Index Price Chart – DXY Weekly
Notes: In my last US Dollar Weekly Price Outlook our bottom line cited that the DXY reversal was, “attempting to pullback below uptrend resistance and while the broader focus remains higher, the risk is mounting for a larger correction IF price closes the week at these levels.” The index registered a low at 98.27 to close at the week at 98.31 before staging a recovery of more than 2.4% this week. The advance takes price back above uptrend resistance and clouds the medium-term technical outlook here.
Initial weekly resistance eyed at the 61.8% retracement of the late-March decline at 101.19 backed by the high-week close at 101.95- both areas of interest for possible topside exhaustion IF reached. Support objectives unchanged at the 61.8% Fibonacci confluence at 97.83/87– ultimately a break / close below 97.35 would be needed to suggest a more significant high was registered last month.
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Bottom line: We’re likely to see more volatility heading deeper into April trade and although the broader focus remains weighted to the topside, the recent US Dollar price recovery remains vulnerable while below the yearly highs-week close. From at trading standpoint, be on the lookout for possible topside exhaustion with a pivot / close back below 99.91 needed to reassert the downside. That said, the headlines will continue to dominate broader market sentiment for the coming days as the Coronavirus continues to ravage the US- stay nimble here.
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--- Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.