✨ DXY Curve Analysis (3W) ✨
Updated
RESISTANCE @ 116.82
— a break above this level would indicate an uptrend
SUPPORT RANGE 101.635 to 105.005
— now that Price Action (3W) has opened/closed below this range I'm anticipating a continuation of the downtrend
SUPPORT @ 90.80
— if Price opens/closes below 89.66, it should continue the downtrend; however, it's highly unlikely to break below.
— a break above this level would indicate an uptrend
SUPPORT RANGE 101.635 to 105.005
— now that Price Action (3W) has opened/closed below this range I'm anticipating a continuation of the downtrend
SUPPORT @ 90.80
— if Price opens/closes below 89.66, it should continue the downtrend; however, it's highly unlikely to break below.
Note
As of today, May 17, 2023, the technical analysis for DXY is mixed. The index is trading at 102.80, slightly below its 50-day moving average of 103.00. However, the DXY is also above its 200-day moving average of 102.50. As price action ranges between these two indicators, it suggests that the bulls and bears are still at war.On the one hand, the DXY has been in a downtrend since March 2023. I'm anticipating this trend to continue shorting, as no significant bullish catalysts are on the horizon. According to the Federal Reserve's agenda, interest rates are expected to rise several times this year.
On the other hand, the DXY is still trading in its Support Range, which is a crucial support level. If the breaks below this level, it could signal a reversal in the downtrend. Additionally, the US economy is still growing (a false-positive), which could support the dollar in the long term.
Overall, the technical analysis for DXY is mixed. The index is currently trading at its 50-day moving average but below its 200-day moving average (based on the 1D chart). The bulls and bears are presently at war, and the direction of the DXY in the near term will likely go to the bears. Of course, this would depend on the outcome of several other key events (listed below).
Here are some additional factors affecting the DXY in the near term:
US Interest Rates:
The US Federal Reserve is expected to raise interest rates several times this year to combat inflation. Higher interest rates make it more expensive to borrow money, which can slow economic growth. This could weigh on the dollar's value, as investors may seek assets offering higher yields.
The Global Economy:
The economy is still growing, which could support the dollar. However, if the global economy slows, it could weigh on the dollar.
Commodity Prices:
Commodity prices are a significant driver of inflation, and if inflation remains high, it could lead to higher interest rates, which would weigh on the dollar. However, if inflation starts to fall, it could lead to lower interest rates, supporting the dollar.
Professor C. E. Ward
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