- Weekly technicals on the US Dollar Index (DXY)- rally vulnerable into slope resistance
- Check out our 2019 projections in our Free DailyFX USD Trading Forecasts
- Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT
The US Dollar Index rallied through the yearly opening-range highs with price now testing a critical resistance range around the 98-handle. Here are the key targets & invalidation levels that matter on the DXY weekly chart heading into the close of the month.
DXY Weekly Price Chart
Notes:In my previous US DollarWeekly Technical Outlook we noted that the index was testing key resistance targets into the yearly highs with a breach / close above the 61.8% retracement of the 2017 decline at, “at 97.87 needed to fuel the next leg higher in the Dollar.” Note that a parallel of the 2011 trendline (red) rests just higher. A topside breach this week registered a high at 98.33 before pulling back with price struggling around this key trendline ahead of the New York close on Friday. A weekly RSI resistance trigger is also being challenged here– watch the weekly close.
Weakness beyond 97.87 into the close would leave the immediate advance vulnerable- initial support rests with the 2018 high-week close at 97.42 with broader bullish invalidation steady at 95.66. A topside breach from here keeps the focus on the highlighted trendline confluence around 99.30s.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Bottom line:The US Dollar Index has broken above the yearly opening-range and while the broader outlook remains weighted to the topside, the immediate advance may be vulnerable IF prices fail to close the week above the 2011 parallel. From a trading standpoint, a good spot to lower long-exposure / raise protective stops. Look for exhaustion ahead of 97.42 on a pullback for support with a breach /close above this resistance zone needed to mark resumption of the broader uptrend.
Even the most seasoned traders need a reminder every now and then-Avoid these Mistakes in your trading
Relevant US Economic Data Releases
Economic Calendar – latest economic developments and upcoming event risk. Learn more about how we Trade the News in our Free Guide!.
— Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex