Daily Chart Analysis of the DXY Dollar Index
The DXY (Dollar Index) is currently approaching a significant supply and resistance zone in the range of 104.00 to 104.50. This level has historically acted as a barrier to further price increases, and we expect a potential rise in supply (selling pressure) around this area, which could temporarily halt the upward momentum in the short term.
Key Levels:
Resistance Zone: 104.00 - 104.50
Potential Target: If a breakout occurs, the next medium-term target may be above this range.
Current Strategy: Short positions can be considered around 104.00 to 104.50, but patience is advised to observe the exhaustion of buying power at this resistance level.
Key Considerations:
Supply Increase Expected:
The resistance level at 104.00 to 104.50 is likely to attract sellers, potentially capping the price in the short term.
The market will need strong buyer momentum to overcome this supply zone.
Watch for Exhaustion of Buyers:
Look for signs of buyer fatigue, such as weaker upward moves, before entering a sell position. This could signal the ideal time to act within this range.
Potential Breakout:
In the event of a strong breakout above 104.50, the upward trend may continue in the medium term, suggesting that selling pressure has been absorbed.
In such a case, waiting for confirmation of sustained price action beyond 104.50 would be essential before considering a reversal of strategy.
Risk Management:
Implement tight stop-loss orders in case the price surges past the 104.50 resistance, invalidating the short-selling scenario.
Conclusion:
At this stage, the 104.00 to 104.50 level represents a critical resistance zone for the DXY. While selling at this range could be profitable in the short term, it's important to wait for clear signs of weakening buyer strength. However, a strong breakout could shift the market's direction towards further price gains in the medium term.
