USD Index Technical Framework to Watch, Big Resistance Ahead
The other day the US Dollar Index (DXY) trigged the inverse head-and-shoulders pattern while also trading above the March trend-line. This has the upside intact, although momentum is a bit of a concern. That could change, then again it might not. In any event, there is an upward channel developing off the Jan low that traders can use as a guide. Stay above the lower parallel and the trend remains near-term neutral to bullish, but break below and the broader downtrend since March may resume. Big resistance lies ahead at the Sep low of 91.74, a level that will of course be of interest should we soon see it. How price action plays out there could go a long way towards how the medium-term trend plays out.
DXY Daily Chart (Sep low ahead)
DXY 4-hr Chart (out of inverse H&S, channel as a guide)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.