Dollar Price Outlook: USD Slammed to Yearly Lows as Fear Runs Rampant
US Dollar Technical Price Outlook: DXY Weekly Trade Levels
- US Dollar technical trade level update – Daily & Intraday Charts
- USD plunges alongside broader risk markets as Coronavirus fears grow
- DXY sell-off targeting initial support objectives just lower
The US Dollar plummeted more than 4% off the February highs in just under three weeks with the decline taking DXY to fresh 2020 lows. The decline marks the largest weekly range for the greenback since January 2017 and is poised to post the largest weekly decline since the May 2017 breakdown. While the broader focus remains weighted to the downside, the sell-off is now approaching initial weekly confluence support just lower and leaves the immediate short-bias vulnerable. 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 we noted that a breakout in DXY kept the focus higher in the greenback with, “subsequent resistance objectives at 99.43 and the 2017 uncovered close at 99.98- an area of interest for possible topside exhaustion IF reached.” The index registered a high at 99.91 before reversing sharply with the decline breaking below yearly open / uptrend support at 96.50 this week.
The next majors support objective is eyed at the 95.46/66 confluence zone where the 38.2% retracement and the 2019 low-week close converge on the lower parallel of the descending pitchfork extending off the 2019/2020 highs- look for a reaction there IF reached. Ultimately, a break / close below last year’s low at 95.03 is needed to fuel the next leg lower in the Dollar with such a scenario exposing the 2016 low-week close / 50% retracement at 93.92-94.08. Initial resistance now back at 96.50 with bearish invalidation now lowered to the median-line, currently ~97.30s.
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Bottom line: The US Dollar price reversal has covered the entire yearly range in under three weeks with the decline now approaching the first major support hurdle. From a trading standpoint, look to reduce short-exposure / lower protective stops on a test of confluence support just lower. Ultimately a rebound may offer more favorable entries closer to downtrend resistance with a break lower needed to fuel the next leg in price. I’ll publish an updated US Dollar Price Outlook once we get further clarity on the near-term technical DXY trade levels.
Previous Weekly Technical Charts
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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.