US Dollar Technical Outlook: USD Plunges on Powell- DXY Support in View
US Dollar Technical Price Outlook: DXY Weekly Trade Levels
- US Dollartechnical trade level update – Weekly Chart
- USD plunges from resistance- risk for larger correction while below median-line
- DXY weekly support at 91.74 (bullish invalidation) – Key resistance 93.76/88, 94.47/65
The US Dollar Index plunged more than 0.8% this week with the DXY reversing just ahead of major technical resistance. The turn registered at a significant time & price and while the broader outlook remains constructive the risk for a larger pullback may be building on the back of this week’s decline. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of this DXY technical setup and more.
US Dollar Index Price Chart – DXY Weekly
Notes: In my last US Dollar Weekly Price Outlook we noted that DXY was probing resistance at the, “objective yearly high-week close at 93.01. A breach / weekly close above this threshold is still needed to mark resumption towards the 2021 high at 93.43 and the 100% extension / 2016 low-week close at 93.76/88- look for a larger reaction in price there IF reached.” The index registered a high at 93.73 last week before pulling back – is a near-term high in place?
Initial support now rests with the 25% parallel of the ascending pitchfork formation extending off the yearly lows with a key technical confluence seen lower parallel / September low / the 52-week moving average at 91.74/80 – an area of interest for possible downside exhaustion IF reached. A break / close below this threshold would be needed to invalidate the broader May rally. A breach / close above resistance at 93.76/88 is needed to mark resumption with such a scenario exposing the 38.2% Fibonacci retracement / March 2020 low at 94.47/65.
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Bottom line: The US Dollar rally faltered just ahead of major technical resistance and the threat for a deeper pullback remains while below 93.76/88. From a trading standpoint, look for possible downside exhaustion ahead of 91.74 IF price is indeed heading higher with a breach / close above the median-line ultimately needed to mark resumption of the broader uptrend. I’ll publish an updated US Dollar Price Outlook once we get further clarity on the near-term technical DXY trading levels.
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--- Written by Michael Boutros, Technical Strategist with DailyFX
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.