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US Dollar Technical Forecast: DXY Rallies for Week Five- USD Levels

US Dollar Technical Price Outlook: DXY Weekly Trade Levels

  • US Dollartechnical trade level update – Weekly Chart
  • USD breakout extends for a fourth week to fresh multi-yearly highs– exhaustion risk near-term
  • DXY support 103, 101.79 (key) – Resistance 103.82, 104.20s, 104.88 (critical)
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The US Dollar Index is poised to close a fifth consecutive weekly advance with DXY up more than 0.18% to trade at 103.47 ahead of the US close on Friday. The rally is testing uptrend resistance here and while the broader focus remains weighted to the topside, once again the immediate advance may be vulnerable while below this slope. These are the updated technical targets and invalidation levels that matter on the US Dollar Index weekly price chart. Review my latest Strategy Webinar for an in-depth breakdown of thisDXY technical setup and more.

US Dollar Index Price Chart – DXY Weekly

US Dollar Technical Forecast: DXY Rallies for Week Five- USD Levels

Chart Prepared by Michael Boutros, Technical Strategist; US Dollar Index on Tradingview

Notes: In my last US Dollar Weekly Price Outlook we noted that the DXY, “rally exhausted into resistance at the 2017 swing highs on the heels of a 5.4% rally in just four weeks– look for consolidation here into the May open. From at trading standpoint, a good zone to reduce long-exposure / raise protective stops – losses should be limited to 101.79 IF price is heading higher on this stretch with a topside breach / close above 103.82 needed to mark resumption of the broader uptrend.” The outlook remains unchanged post-FOMC with the immediate focus on possible topside exhaustion still while below slope resistance.

Weekly resistance remains at 103.82 (2017 high) backed by the upper parallel in red (currently ~104.20s) and the 1999 swing high at 104.88– looking for a larger reaction in price there IF reached. A topside breach there would likely fuel another accelerated breakout with the next weekly level of interest eyed at the 1989 high near 106.56.

A weekly close below the 2016 high-close at 103 would be needed to suggest a more significant near-term high is in place with such a scenario exposing a larger washout towards the 2020 high-week close / 61.8% Fibonacci retracement of the 2001 decline at 101.79/94are of interest for support / possible downside exhaustion IF reached.

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 rally is continuing to test uptrend extremes here. From a trading standpoint, it’s either a pullback into uptrend support to offer more favorable entries or a breakout here to unleash the next leg higher for the bulls. If you’re not already involved here, don’t chase and stay tuned! I’ll publish and updated US Dollar Price Outlook once we get further clarity on the near-term DXY technical trade levels.

Previous Weekly Technical Charts

— Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex