US Dollar Technical Outlook Turning Positive: USD Charts to Watch
USD Technical Outlook
- US Dollar Index (DXY) turning up from bottoming sequence
- March trend-line, September low will be first tests to watch
- EUR/USD, GBP/USD, USD/JPY, USD/CAD charts to watch
US Dollar working on turning the corner
The US Dollar Index (DXY) is in the process of turning higher, representing what may potentially amount to a broad USD rally. The index in the short-term is working on an inverse head-and-shoulders pattern that could soon have the March trend-line in focus if the neckline is broken.
In the event the pattern is triggered and the March trend-line is breached, the next level of significant resistance to watch will be the September low at 91.74. Both of these medium-term thresholds have significant importance to the outcome on a boost higher from here.
Should the head-and-shoulders fail to trigger above the neckline and rollover towards a break of 90.05, then look for a potential continuation in the downward trend towards the 2018 low at 88.27.
At the immediate moment, the upside is looking increasingly favorable, but we can’t rule out a pattern failure. With that in mind, waiting for confirmation will be key.
Turning to a few key USD charts; EUR/USD is looking nearly opposite the DXY (EUR = 57.6% of DXY), GBP/USD is posting a rising wedge that could soon trigger, USD/JPY channel is about to break, and USD/CAD is trying to break a falling wedge.
US Dollar Index (DXY) Daily Chart (inverse H&S, top-side resistance to watch)
EUR/USD 4-hr Chart
GBP/USD 4-hr Chart
GBP/USD Chart by TradingView
USD/JPY 4-hr Chart
USD/CAD 4-hr Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX