US Dollar Price Technical Outlook: DXY Short-Term Trading Levels

  • we DollarTechnical Updated Trading Levels – Daily and Intraday Charts
  • USD Reaches New Yearly Highs as Risky Flows Fuel USD and Gold Rise
  • Critical resistance at 97.71/91 – Constructive as above the monthly open at 96.70

the US dollar index jumped more than 3.2% from the yearly low, as Russia’s invasion of Ukraine today fueled risk aversion in global equity markets. The DXY has reached a new yearly high with the immediate advance now approaching a critical technical confluence – we are on the lookout for a possible inflection out of this zone in the days ahead with a constructive broader outlook above February opening. It’s the updated technical targets and invalidation levels that count on the American dollars Index price chart. Review my last Strategy Webinar for a detailed analysis of this DXY technique setup and more.

US Dollar Index Price Chart – DXY Daily

Chart prepared by Michel Boutrostechnical strategist; US Dollar Index on Tradingview

Technical outlook: The US Dollar Index breached key resistance levels with DXY up more than 2.5% from February aperture range low. The rally has moved past the yearly highs on this streak, with the index now eyeing a critical resistance pivot at 97.71/91 – a region defined by the 2018 high, the 61.8% retracement of the decline. 2020, the 61.8% retracement of the wider 2017 decline and the 100% extension of the advance from the January low. Suffice it to say, this is a significant hurdle and we are looking for a possible inflection in this threshold.

US Dollar Index Price Chart – DXY 240min

US Dollar Index Price Chart - DXY 240min - USD Trade Outlook - Dollar Technical Forecast

Remarks: A closer look at DXY price action further shows the extent of today’s breakout with the break above the monthly open target/ Median line triggering a massive surge towards the aforementioned resistance zone. Initial Support now rests at 96.70 short term bullish invalidation noted weekly-open at 96.10. A breach up from here would likely trigger another accelerated rally with resistance targets targeted at the March 2020 low at 98.27April 2020 low at 98.81 and the 99-handle.

At the end of the line : A massive bout of risk aversion fueled a breakout in the US Dollar, with the index now approaching a key long-term technical pivot zone that could halt the advance. From a trading standpoint, a good region to reduce long exposure portions/increase protective stops on a stretch towards 97.71/91 – expect a reaction there with a daily close above – top necessary to support immediate advance. Losses should be limited to the monthly open IF the price is indeed up.

Note that the Fed’s favorite inflationary reading is on tap tomorrow with consensus estimates calling for Core Personal Consumption Expenditure (PCE) to print at 5.1% – the highest level since 1983. Be aware of the geopolitical headlines in Europe as the conflict escalates between Ukraine and Russia could continue to fuel safe-haven flows into the greenback. Buckle up! The next 24 hours will be critical for the dollar in the weekly close – stay nimble here. Review my latest American dollars Weekly Price Outlook for an in-depth look at longer-term DXY technical trade levels.

For a full analysis of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Bbuild a Jrading Sstrategy

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– Written by Michel BoutrosCurrency Strategist at DailyFX

To follow MIchael on Twitter @MBForex

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