US Dollar Forecast: Pivotal Week Ahead, DXY at a Big Spot
USD on the verge of testing big support (via DXY)
The US dollar is on the verge of testing big support as the DXY is trading around both the important March low and just above the trend-lines from 2014 (daily chart) and 2011 (weekly chart). The slide could come to an end this week, even if only temporarily, as price becomes extended into major support.
A push higher from support will initially be viewed as countertrend in nature given the intermediate-term trend lower off the March highs. The June low at 95.72 and trend-line from May are viewed as the first levels of meaningful resistance on a rebound.
However, if a rebound doesn’t develop the Dollar may be on the verge of a much larger decline. A break under 93 would have price well below the March low and under the 2014/2011 trend-lines. This would open a path up for an extended decline towards 88.
But before getting ahead of ourselves we need to see how the DXY responds to support just at its feet. This coming week could prove pivotal for the foreseeable future.
US Dollar Index (DXY) Daily Chart (trading around support)
US Dollar Index (DXY) Weekly Chart (2011 trend-line)
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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.