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
More View more
Real Time News
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/KY6MiOC9Y6
  • US House Speaker Pelosi says top-line spending number may change but hopes for $3.5 trillion in spending bill - BBG
  • RBA Minutes: - Board committed to providing high level of monetary support - Q3 GDP expected to decline materially - Central scenario is rates on hold until 2024 - BBG $AUDUSD
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-21
  • New Zealand reports 14 new local Covid cases - BBG
  • I had a chance to talk with @tastytradeRyan and @victorJ0NES about Evergrande and its impact on US markets — always great talking with these two guys on Mondays. https://t.co/vddTknnPWC
  • RT @cheddar: Stocks dropped the most since May on Monday, sending shockwaves through Wall Street. @CVecchioFX explains the global impact of…
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/DWm7cBMUg9 https://t.co/EegiwWMe9V
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDdK93P https://t.co/ZE0Hgn9PCM
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePT7Yu8 https://t.co/GFx3b1W0OD
US Dollar Technical Outlook: DXY Ready to Challenge Yearly High

US Dollar Technical Outlook: DXY Ready to Challenge Yearly High

Paul Robinson, Strategist

USD Technical Outlook

  • DXY firming up nicely just beneath the yearly high
  • March 2020 low will become targeted on breakout

US Dollar Technical Outlook: DXY Ready to Challenge Yearly High

The US Dollar Index (DXY) has been quietly firming up in recent weeks, with the price action beginning to take on the shape of an ascending wedge. This development is happening under the yearly high created in March at 93.43.

Given the pent up nature of price action beneath such a critical level, it appears it is just a matter of time before we see the yearly high taken out. This is seen as leading the DXY to the March 2020 low at 94.65, a level that was validated as resistance back in September.

Before getting to that point, it will be important for the index to continue staying firm; a break below 92.47 would be reason for caution as the recent higher low would be breached. It wouldn’t necessarily turn the picture outright bearish, but certainly undermine the bullish case.

Tactically speaking, the ascending wedge structure is very near breaking (93.19) and would-be longs may want to enter even though the yearly high is not far ahead. The thinking is that even if a failure occurs at the yearly high a decision can be made as to whether to maintain a position or not. If the yearly high is broken then staying with or even taking a more aggressive stance may be the way to play.

For shorts to gain appeal, it will at the least take a strong rejection at the yearly high or a breakdown of the ascending wedge pattern. While this could certainly happen, it is seen as a lower probability scenario at this time.

US Dollar Index (DXY) Daily Chart

dxy daily chart

DXY Chart 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