USD Technical Outlook
- US Dollar Index (DXY) is turning higher from support
- Correction may be over if last week’s low can hold
US Dollar Technical Analysis: DXY Coming off Support, Trying to Turn the Corner
The US Dollar Index (DXY) is turning higher from support around the 105 level, and within the context of a broader uptrend the correction may have ended. It will be important, however, for that to be the case that we see the 104.63 low from last week hold.
The overall price action since the July peak has smacked of corrective behavior, with momentum lacking on the pullback. It is possible we see more downside from here if last week’s low fails, but the expectation at this juncture is it would be more of the same choppy, corrective type price action.
Looking to the top-side, the first hurdle to cross to turn the recent downtrend around clocks in at 10693, a recent short-term swing-high. A crossing of that line and the sequence of lower-lows and lower-highs will be broken.
The first big objective to overcome on a rally is the July high at 10924. The thinking is that once the correction is over and a rally recommences that we will see the 2001 high at 121 hit and possibly exceeded.
If the recent downtrend continues and the DXY fails to cross 10693, then we may see it fall back to 10342 next. But this would require that last week’s low near 105 is taken out. For now, running with a bullish trading bias that will strengthen on a crossing of the August 5 high.
US Dollar Index (DXY) Daily Chart
DXY Chart by TradingView
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX