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US Dollar Technical Forecast: USD Eyes Fresh Yearly Highs- NFP on Tap

US Dollar Technical Forecast: USD Eyes Fresh Yearly Highs- NFP on Tap

Michael Boutros, Strategist

US Dollar Technical Price Outlook: DXY Weekly Trade Levels

  • US Dollar technical trade level update – Weekly Chart
  • USD rally approaching key resistance pivot ahead of US Labor Report
  • DXY weekly support at 93.80, 93.27 (bullish invalidation) – Key resistance 94.47/65, 95.15
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The US Dollar Index is up more than 1.2% off the October lows with the DXY now eyeing key resistance at the yearly range-highs heading into US Non-Farm Payrolls tomorrow. We’re looking for possible price inflection here with a close above needed to keep the immediate long-bias viable. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of this DXY technical setup and more.

US Dollar Index Price Chart – DXY Weekly

US Dollar Index Price Chart - DXY Weekly - USD Trade Outlook - Technical Forecast

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 the DXY, “breakout may be stalling here into uptrend resistance and while the broader focus remains constructive, the immediate advance may be vulnerable in the weeks ahead.” Nearly a month later and the index has continued to hold below key technical resistance at 94.47/65- a region define by the 38.2% Fibonacci retracement of the 2020 decline and the March 2020 low. An outside-week reversal candle last week takes the index back into the 2011 trendline – once again we look for possible price inflection here with US Non-Farm Payrolls on tap tomorrow.

Weekly support rests back the lower parallel of the ascending pitchfork formation we’ve been tracking off the yearly lows- this slope converges on last week’s low near ~93.27 over the next few weeks and will serve as our near-term bullish invalidation level. A topside breach / close above this resistance range is needed to keep the long-bias viable with such a scenario exposing the November 2017 high at 95.15 and critical resistance at the 50% retracement / 2020 yearly open at 96.10/50.

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 is once again testing major slope resistance and we’re looking for a reaction here into the close of the week. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards the 94.47/65 resistance – pullbacks should be limited to this week’s low IF price is heading higher. Stay nimble heading into US NFPs tomorrow and watch the close; a topside breach marks resumption of the May uptrend towards fresh yearly highs. Failure here, may ultimately offer more favorable opportunities closer to trend support. Review my latest US Dollar Price Outlook for a closer look at the near-term technical DXY trading levels.

Key US Data Releases

Key US Data Releases - NFP - USD Weekly Event Risk

Economic Calendar - latest economic developments and upcoming event risk.

Previous Weekly Technical Charts

--- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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