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US Dollar Technical Analysis: DXY Levels and Outlook for the Days Ahead

US Dollar Technical Analysis: DXY Levels and Outlook for the Days Ahead

Paul Robinson,
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USD Technical Outlook

  • US Dollar Index (DXY) working its way higher towards major resistance
  • Intermediate-term path of resistance remains bullish for now

The US Dollar Index (DXY) has been making good headway in recent trade, with room to run higher yet before possibly running into problems. Looking ahead to resistance, there is a major zone that lies around the 94.30/95 vicinity.

The resistance zone comes by way of peaks created back in September and November. This area of resistance was once support in March of last year as the dollar bottomed and spiked on corona fears.

At this time there isn’t anything visible to the left, price-wise, to keep resistance from getting tested, but that doesn’t mean there won’t be bumps along the way if it is to be the case. Looking immediately lower, there is a trend-line from late February that could help keep the trend powering higher.

If the trend-line is broken, then will be looking to the March 9 peak and 200-day at 92.43 as an additional source of support. It is ideal, though, if the trend-line holds to keep price moving higher in a more orderly fashion.

For now, fresh longs don’t hold a good deal of appeal from a risk/reward perspective without some support to lean against. Existing longs may want to keep an eye on the aforementioned support levels. Shorts may be best served being patient until further price action provides better clarity for the downside.

US Dollar Index (DXY) Daily Chart

DXY daily chart

DXY Chart by TradingView

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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.