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US Dollar Technical Analysis: Old Resistance, New Support

US Dollar Technical Analysis: Old Resistance, New Support

Paul Robinson, Strategist

USD Technical Outlook

  • US Dollar Index (DXY) is pulling back at the moment
  • Weakness could bring into play old resistance as new support

US Dollar Technical Analysis: Old Resistance, New Support

The US Dollar Index (DXY) has been on a tear lately, and on that it took out some resistance levels in the process of rallying. The levels previously viewed as resistance look like they might get their chance to earn their stripes as support.

The levels in question are a pair of minor horizontal levels from 2020 and, more importantly, a top-side slope that had held down price for over two months before the recent breakout. The area around 97.80 is the most important spot to watch.

A pullback to that point and hold could present an interesting opportunity for would-be longs to enter in the direction of the trend with a threshold to lean on for setting stop losses. Hold support and the outlook would be neutral at worst, but likely bullish.

This could set up for a move towards the 2001 to present trend-line. From here to there would leaves a lot of room. On the flip-side, if support fails then we will need to reevaluate before looking to that longer-term level.

US Dollar Index (DXY) Daily Chart

usd 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.

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