DXY: Bears Continue To Drive The Dollar Lower, Expecting 95.50
The US Dollar Index appears to be playing out as expected with regards to last weeks technical analysis. Last Thursday we saw another nice rejection of the Bearish trend line to send DXY tumbling below the 96.00 support floor. We have since had a retest of this new-found resistance and continuation to the downside.
Stepping up to higher time frames for a more substantial view of the Index, the monthly chart printed a very Bearish looking evening star formation at the key resistance level 97.00 with Decembers candlestick closure. This closure also took the form of a large shooting star candle.
Stepping down to the weekly chart we can see recent hanging man and shooting star candles forming.
The Daily chart shows us with a little more clarity how price has been behaving recently with the Bullish trend line finally being broken, retested and continuation to the downside.
The 4-hour chart shows clear lower highs and lower lows being printed confirming a new downtrend with 96.00 support floor being penetrated once again.
Immediate target for DXY is 95.50 followed by 95.00.
This week however does hold potential for the Dollar to gain strength from Fundamental drivers, President Trump insists trade talks with China are going very well. Wednesday saw the release of FOMC meeting minutes and Thursday Fed Chair Powell is due to speak. All of these events have a tendency to fuel the market with volatility.
Written by Sam Moore