US Dollar Technical Forecast: Bullish
- US Dollar DXY index drops a third week, closing 0.86% lower
- Greenback on track to continue recent trend and drop further
- 50-day Simple Moving Average may serve as resistance above
The US Dollar moved lower for a third consecutive week, with the DXY index posting a 0.86% loss. Prices may find support at the current 61.8% Fibonacci retracement level from the January to March move. A bounce higher would confirm trendline support (green line) off the January low, marking a third contact point.
Greenback strength has been largely absent through April following a solid 2.59% March gain, the third straight monthly gain. Still, prices are now trending under the prior month’s opening price. A move lower would likely see a drop to the 78.6% Fibonacci retracement level at the 90.11 mark, just above the psychologically imposing 91 handle.
That said, a bounce higher, aided by fib and trendline support, would see DXY aim to meet an area of trendline resistance off the March swing high. The 50-day Simple Moving Average sits above if the bullish reversal takes place. Overall, the most likely path forward appears to be tilted to the downside, but price is at support, and a move higher wouldn’t be a surprise.
US Dollar DXY Daily Chart
Chart created with TradingView
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--- Written by Thomas Westwater, Analyst for DailyFX.com
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