Dollar Index Technical Analysis – July 16th – DXY Update – Weekly Bearish Engulfing
- The dollar is trading higher after losing around 1.7% last week when Fed chair Bernanke suggested a highly accommodative monetary policy would be required for the foreseeable future. Bernanke’s congressional testimony on Wednesday and Thursday is now seen as key in this area.
- This resulted in a weekly timeframe bearish engulfing candle for the DXY as per the longer term chart below.
- From a technical perspective we note the DXY found an element of support around the 50% retrace level last week, the 61.% Fib is located around 82.12 and proved to be interim resistance in June.
- Key support has previously been seen around the 81.40 area, this remains as a technical area of interest – should price see a sustained corrective move lower.
- We note that the US dollar reached a three-year high versus a basket of currencies last Tuesday before the aforementioned key reversal day.
- The key EURUSD pair is trading around 1.3070 after hitting a 1.2992 low today and clearing the stops under this round number area. Gold is trading near flat on the day at 1284.56.
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