The US Dollar Index (DXY) experienced a pronounced bearish momentum last week, underscored by the RSI trending down and touching the 30 line, indicative of potential oversold conditions. Concurrently, the MACD maintained a bearish market flow. Adding to the bearish sentiment, the 20-day exponential moving average (EMA) crossed below the 50-day EMA, both exhibiting a downward slope. Moreover, the price currently trades below the critical 200-day EMA, signaling a sustained bearish trend. Last week's notable event was the breach below the 200 EMA, followed by a retest that resulted in a rejection below this key level.
A significant support level is identified at 102.936, marked by sell-side liquidity observed from the swing low on August 30, 2023. A breakthrough of this support level could potentially lead to the next target at the swing low from August 10, 2023. On the contrary, if the price fails to breach 102.936, there's potential for a liquidity sweep above the swing high from November 22, 2023, at 104.220, coinciding with the 200 EMA. However, a bullish change of character would necessitate sustained price action above the 200 EMA.
Examining the longer-term outlook on the monthly chart, a pervasive bearish sentiment is evident with all indicators signaling a sell. The projected target for the bearish move is at 99.587, expected in the coming months. The weekly chart further confirms the bearish market flow, with RSI trending down below the midline and the MACD recently crossing under, marking its first red bar. Notably, the price is currently 6000 pips away from touching the long-term uptrend channel that has been intact since 2008, emphasizing the significance of this level in the broader market context.
In conclusion, the comprehensive analysis points toward a robust bearish sentiment for DXY, with key levels to monitor at 102.936 and 104.220. Traders should remain vigilant for potential reversals or confirmations, taking into account the broader market developments and the long-term trend channel that has been in place since 2008.
A significant support level is identified at 102.936, marked by sell-side liquidity observed from the swing low on August 30, 2023. A breakthrough of this support level could potentially lead to the next target at the swing low from August 10, 2023. On the contrary, if the price fails to breach 102.936, there's potential for a liquidity sweep above the swing high from November 22, 2023, at 104.220, coinciding with the 200 EMA. However, a bullish change of character would necessitate sustained price action above the 200 EMA.
Examining the longer-term outlook on the monthly chart, a pervasive bearish sentiment is evident with all indicators signaling a sell. The projected target for the bearish move is at 99.587, expected in the coming months. The weekly chart further confirms the bearish market flow, with RSI trending down below the midline and the MACD recently crossing under, marking its first red bar. Notably, the price is currently 6000 pips away from touching the long-term uptrend channel that has been intact since 2008, emphasizing the significance of this level in the broader market context.
In conclusion, the comprehensive analysis points toward a robust bearish sentiment for DXY, with key levels to monitor at 102.936 and 104.220. Traders should remain vigilant for potential reversals or confirmations, taking into account the broader market developments and the long-term trend channel that has been in place since 2008.
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discord.gg/a7sfTVkgxc
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.