US Dollar Technical Forecast for the Week Ahead: USD Rises…
(MENAFN- DailyFX) US Dollar Technical Price Outlook: DXY Weekly Trade Levels
- US Dollar Trade Level Technical Update – Weekly Chart
- USD regains resistance on the upside – risk of price inflection ahead
- DXY Weekly Support 104.88, 103 (key), 101.94 – Resistance 107.51-108.09 (key), 109.29, 110.25
The US Dollar Index jumped more than 2.5% from monthly lows with a breakout of the August opening range bringing DXY back to technical resistance. Although the technical outlook remains constructive, the immediate advance may be vulnerable here and we are looking for a possible price inflection in the days ahead to validate the resumption of a broader uptrend. It is the updated technical targets and invalidation levels that matter for the weekly price of the US Dollar Index. Check out my latest strategy webinar for a detailed walkthrough of this DXY technical setup and more.
US Dollar Index Price Chart – DXY Weekly
Chart prepared by Michael Boutros, Technical Strategist; US Dollar Index on Tradingview
Notes: In my last weekly US Dollar price outlook, we noted that we were looking to validate a DXY low with “weekly support now seen at July monthly open / 1999 high at 104, 77/88 – an area of interest for possible Downside SI exhaustion reached.The index briefly bottomed at 104.63 before bouncing significantly higher as the rally broke past monthly range-opening highs on Thursday The advance is now testing the first major resistance zone at 107.51-108.09 – a region defined by the confluence of the 61.8% Fibonacci retracement of the July low, the yearly close of the week high and the 2001 low. Inflection risk in this region with a weekly close above needed to keep the immediate advance viable in the days ahead towards the yearly highs at 109.29 and the 78.6% retracement of the drop from 2001 to 110.25.
For a full analysis of Michael’s trading strategy, check out his Fundamentals of Technical Analysis series on Developing a Trading Strategy.
Bottom Line: A breakout of the monthly opening range keeps focus on a month-end high in the US Dollar Index – that said, the advance is testing initial resistance here. From a trading standpoint a good area to cut portions of long exposure/increase protective stops – losses should be limited at the August open at 105.82 IF price is indeed heading higher on this section. Review my latest short-term US Dollar price outlook for a more in-depth look at short-term XAU/USD technical trade levels.
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— Written by Michael Boutros, Technical Strategist at DailyFX
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