News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/SkopOpNy3P
  • US Dollar Trend Still Points Higher After FOMC, Q2 GDP Eyed - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2021/07/29/US-Dollar-Trend-Still-Points-Higher-After-FOMC-Q2-GDP-Eyed.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #USD #dollarindex #Fed #FOMC #GDP https://t.co/9ppEljRFq6
  • 💶 Industrial Sentiment (JUL) Actual: 14.6 Expected: 13 Previous: 12.8 https://www.dailyfx.com/economic-calendar#2021-07-29
  • 💶 Economic Sentiment (JUL) Actual: 119 Expected: 118.5 Previous: 117.9 https://www.dailyfx.com/economic-calendar#2021-07-29
  • 💶 Consumer Confidence Final (JUL) Actual: -4.4 Expected: -4.4 Previous: -3.3 https://www.dailyfx.com/economic-calendar#2021-07-29
  • Heads Up:💶 Industrial Sentiment (JUL) due at 09:00 GMT (15min) Expected: 13 Previous: 12.7 https://www.dailyfx.com/economic-calendar#2021-07-29
  • Heads Up:💶 Economic Sentiment (JUL) due at 09:00 GMT (15min) Expected: 118.5 Previous: 117.9 https://www.dailyfx.com/economic-calendar#2021-07-29
  • Heads Up:💶 Consumer Confidence Final (JUL) due at 09:00 GMT (15min) Expected: -4.4 Previous: -3.3 https://www.dailyfx.com/economic-calendar#2021-07-29
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/oeAKuToQ5b
  • 🇬🇧 Mortgage Approvals (JUN) Actual: 81.3K Expected: 86.1K Previous: 87.545K https://www.dailyfx.com/economic-calendar#2021-07-29
USD Technical Outlook: DXY Squeeze Set to Continue

USD Technical Outlook: DXY Squeeze Set to Continue

Paul Robinson, Strategist

USD Technical Outlook

  • US Dollar Index (DXY) squeeze took market by surprise
  • A small digestion period would do some good for further gains
Advertisement

USD Technical Outlook: DXY Squeeze Set to Continue

Last week, market participants were caught leaning the wrong way as an overcrowded short USD trade unraveled in the wake of shifting rate expectations from the Fed. The 2% weekly gain in the DXY was the largest since coronavirus sent shockwaves through markets in March of last year.

The rally appears set to continue, but maybe not before a little backing-and-filling takes place. This morning, the dollar is off modestly and could find itself see-sawing in the near-term as it digests the initial burst.

A short period of horizontal price action could be good for both setting the DXY up for further gains and providing traders with something to work with in the form a consolidation breakout pattern. For existing longs from good prices, sitting tight for now looks like a prudent play. For shorts, appeal is very low until at least we see some resistance levels ahead tested and rejected.

First up as resistance is a trend-line running lower from September over the March high. This isn’t considered a significant level of resistance at this juncture, but we will need to see how price behaves in the event the line is touched.

More significantly, the March high at 93.43 appears to be the next big hurdle to watch out for. The thinking is we may see that level here fairly soon. Things could become quite interesting at that juncture as it is the year high and the last lower-high in the downtrend from the March 2020 high.

For now, in the very short-term the focus is on watching for a consolidation pattern to form for continuation-style trades. If we see a pattern form and break then we will look for the aforementioned levels to get tested. If we see a larger retracement develop, then the 200-day could come into play at 91.51, and possibly support around 91.30. But given how strong of an up-move we just saw, and how short the market is, if the DXY is to continue higher we likely won’t see much of a retracement.

US Dollar Index (DXY) Daily Chart

usd index daily chart

DXY Charts by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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.

DISCLOSURES