USD Technical Outlook: Recent History Suggests Pullback Nearly Finished
US Dollar Highlights:
US Dollar Index (DXY) pullback may soon be finished
The US Dollar Index (DXY) has been dipping, but if it is to behave as it has since last year then the dip may be very near finished. It came hot out of the gates to start the month, in much the same way it did after three other medium-term declines ended over the past year+. The current pullback has taken back about half the rally and if it isn’t stopping here, perhaps the 200-day just a little bit lower will do the trick. If history holds, then a sizable rip should be in store next.
US Dollar Index Daily Chart (dip then rip?)
EUR/USD the driver here, watch resistance
The Euro is in charge here, as it represents nearly 60% of the DXY’s weighting. It’s called the ‘Anti-Dollar’ for a reason. As discussed in this morning’s Euro piece, EUR/USD is up against old support that is now resistance again. A turn down from here will put in that low for the DXY, and with the Euro following its downtrend the Dollar will resume its uptrend.
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EUR/USD Daily Chart (at resistance)
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.