Dollar Index Analysis
Evening Update: Will the Dollar Index (DXY) continue to climb or decrease after reaching 103.50 ?
The Dollar Index (DXY) was trading around a strong support level between 100.50 and 100.80 last to last week, and it recovered well from there. This region provided significant support for the Dollar Index, which the price cautiously followed before erupting far past it. Previously, between February and May, the 100.50-100.80 zone offered consistent support. DXY recovered strongly after that, trading in the 106.50-107.00 region.
- The US Dollar Index (DXY) is retreating significantly after testing multi-year resistance around 103.50-104.00. It's hardly surprising to see the dollar fall here.
- Based on the current trend, the DXY could rally into the 105.50-107.00 region.
- The chart indicates a potential triple bottom between 100.50 and 100.80, and the DXY may rise upward since testing this critical support.
Please refer to the important support zone shown in the chart above. The Dollar Index advanced as bulls successfully held the 100.50-100.80 mark. As we observed in 2023, the Dollar Index appears to be trading mostly horizontally in a broad range of 100.50 to 105.50. If the Dollar Index can reclaim the 103.50-104.00 level, it may show signs of strength in the coming months. DXY could soon trade in the 105.50-107 area.
Please refer to the chart below for a better understanding and explanation.
The DXY is pulling back, driving EUR/USD and GBP/USD higher. We knew that DXY 103.50-104.00 would be a huge challenge for dollar bulls. This week, the dollar index attempted to break above 103.50, but the daily close proved challenging for bulls. The daily close did not quite convert 103.50 to support. We need to see a compelling break above that zone on higher time periods, and tuesday's close of 103.50 was insufficient.
As previously stated, 100.50-100.80 is the must-hold barrier for DXY bulls. On longer time frames, we will maintain our optimistic outlook on the dollar.
However, 103.50 is the key to unlocking levels like 104.20, which is a significant milestone for the DXY, as a sustained break above would convert the trend from bearish to bullish. For the time being, the DXY is trading around the 102.60 to 103.50 range, with 103.00 offering daily support. We remain bullish on the US dollar as long as it closes over 102.60 on a daily basis.
Please review the support and resistance levels on the Dollar Index (DXY) weekly chart. Each level is represented by a spot chart.
|
Dollar Index |
Support |
Resistance |
|
Level 1 |
100.80 |
105.50 |
|
Level 2 |
100.50 |
107.00 |