Dollar Index Analysis

• 27 February, 2024 Ruchit Thakur

Dollar Index Analysis

Evening Update: Will the Dollar Index (DXY) continue to grow or decline after touching 105.00?

Last month, the Dollar Index (DXY) was trading at a strong support level of 100.50 to 100.80, but it recovered quickly and reached 105.00. This zone provided good support for the Dollar Index, which the price constantly monitored before skyrocketing far above it. Previously, between February and May, the 100.50-100.80 zone provided consistent support. The DXY recovered swiftly and traded between 106.50 and 107.00.

The US Dollar Index (DXY) has seen some selling pressure, falling from weekly highs of 105.00. We'll go over all of this using a chart and several time frames. Please have a look.

• DXY has a solid support range of 100.50 to 100.80.
• Based on previous trends, the DXY might rise to 105.50-107. 
• The chart reveals a possible triple bottom between 100.50 and 100.80, and the DXY has steadily gained since testing this critical support level. 

Please refer to the diagram above, which depicts the vital support zone. The Dollar Index rose as bulls successfully held the 100.50-100.80 level. As we saw in 2023, the Dollar Index tends to trade primarily horizontally in the 100.50 to 105.50 area. DXY may soon trade between 105.50 and 107.

The preceding CPI data boosted dollar bulls, followed by unemployment claims data, and the index jumped from 102.20 to 104.50. CPI numbers fueled the Dollar Bulls.

Using charts and statistics, we can deduce that the DXY is bullish and will trade in the 105.50-107.00 zone. It may return to the 102.50-103.00 level in the immediate term, but each down move allows bulls to drive prices higher into the 105.50-107.00 range.

To find support and resistance levels, please see the weekly chart of the Dollar Index (DXY). Every level is represented by a spot chart.