US Dollar Outlook: DXY Bulls Halted at Pivotal Resistance- USD Levels

12 Jul 2021 18:30, GMT

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US Dollar Technical Price Outlook: DXY Weekly Trade Levels
US Dollar Index Price Chart – DXY Weekly
Key US Data Releases
Previous Weekly Technical Charts

US Dollar Technical Price Outlook: DXY Weekly Trade Levels

US Dollar technical trade level update – Weekly Chart
USD price breakout stalls at critical resistance confluence- risk for inflection off 92.28/46
DXY weekly support at 91.83, 90.82 (key) – Topside breach exposes 93 & 93.88

The US Dollar Index surged more than 2.8% last month with rally stalling at key resistance into the July open – we’re looking for price inflection off this threshold with the bulls at risk while below. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart heading into the Fed. Review my latest Strategy Webinar for an in-depth breakdown of this DXY technical setup and more.

US Dollar Index Price Chart – DXY Weekly

Chart Prepared by Michael Boutros, Technical Strategist; US Dollar Index on Tradingview

Notes: In last month’s US Dollar Weekly Price Outlook we noted that DXY had been defending, “yearly open support at 89.93 for over a month now and leaves the broader short-bias vulnerable while above.” The index surged more than 3.7% in the following weeks with the rallying now holding below a critical resistance range at 92.28/46- a region defined by the 2018 yearly open and the 23.6% Fibonacci retracement of the 2020 decline. Price has held below this confluent zone for the past four weeks with the July opening-range taking shape just below.

Initial weekly support rests with the 52-week moving average, (currently ~91.83) with broader bullish invalidation now raised to the 61.8% retracement of the 2021 range / 2018 low at 90.82-91.01 – look for downside exhaustion ahead of this zone in the weeks ahead IF price is indeed heading higher with a breach / weekly close higher exposing subsequent resistance objectives at the yearly high-week close at 93.01 and the 2016 low-week close at 93.88.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: The US Dollar rally has stalled here at confluent resistance and leaves the May advance vulnerable while below 92.46. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops – look for an exhaustion low ahead of 91 with a topside breach exposing a fresh yearly highs in the index. I’ll publish an updated US Dollar Price Outlook once we get further clarity on the near-term technical DXY trading levels.