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US Dollar Technical Forecast: DXY, EUR/USD Chart Setups

US Dollar Technical Forecast

  • US Dollar DXY index breaks 5-week winning streak, but upside may resume
  • EUR/USD upside looks exhausted, and prices look primed to continue sliding

US Dollar DXY Index – Technical Forecast: Bullish

The DXY Index broke a 5-week winning streak last week, losing almost a full percentage point. Still, the Greenback remains around 1.5% higher for March. The rising 20-day Simple Moving Average underpinned prices after bears advanced through an ascending trendline earlier in the week. The 23.6% and 38.2% Fibonacci retracement levels appear to be providing intermediate support and resistance.

A break above the 23.6% Fib level would open the door for bulls to attack the prior 2022 high at 99.41. That could introduce a fresh breakout if prices manage to clear that level. The 100 psychological level – not traded at since May 18, 2020 — would offer the next major obstacle. The MACD line looks to be on track to cross above its signal line, a bullish sign that may introduce some upside in prices.

US Dollar (DXY) 4-Hour Chart

dxy chart

Chart created with TradingView

EUR/USD Technical Forecast: Bearish

The Euro scored a win against the US Dollar, rising 1.23% for the first weekly gain since January. Still, prices remain near the yearly low, set just earlier this month. EUR/USD climbed above its 20-day Simple Moving Average but quickly surrendered those gains. Bulls would face the 50-day SMA near 1.1245 if prices manage to move higher.

However, a Bear Flag pattern has taken shape. That may result in a bearish continuation if prices break below flag support. The 2022 low at 1.0804 would shift into focus if that happened, possibly also opening up a route to test the 2020 low at 1.0636. The MACD line recently crossed below its signal line, indicating that upside momentum may be exhausted.

EUR/USD 4-Hour Chart

eurusd chart

Chart created with TradingView

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter