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US Dollar Forecast: Positive Slope in 50-Day Points to USD Breakout

US Dollar Forecast: Positive Slope in 50-Day Points to USD Breakout

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US Dollar Talking Points

The US Dollar Index (DXY) consolidates after trading to a fresh yearly high (105.79) earlier this month, but the Greenback may attempt to break out of the range bound price action if it continues to track the positive slope in the 50-Day SMA (103.04).

Technical Forecast for US Dollar: Bullish

The US Dollar Index (DXY) appeared to be on track to test the December 2002 high (107.31) as the advance from the May low (101.30) pushed the Relative Strength Index (RSI) towards overbought territory, but the oscillator struggled to push above 70 as the index failed to break above the 105.80 (61.8% expansion) hurdle.

US Dollar Index (DXY) Daily Chart

Source: TradingView

As a result, DXY may trade within the June range over the near-term, with a break/close below the 103.30 (50% expansion) area bringing the monthly low (101.64) on the radar.

However, DXY may respond to the 50-Day SMA (103.04) like the price action seen earlier this month, and the Greenback may continue to track the positive slope in the moving average as long as it manages to hold above the 130.30 (50% expansion) region.

With that said, need a break/close above the 105.00 (23.6% expansion) handle to bring the 105.80 (61.8% expansion) region back on the radar, with the next area of interest coming in around 107.20 (38.2% expansion).

USD Forecast
USD Forecast
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--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.