US Dollar Index Price Analysis: Bearish Reversal on Inventory Distribution drags to near 102.50


  • Inventory distribution near 19-year high levels has marked a bearish reversal in the counter.
  • The 20- and 50-EMAs are scaling lower, which adds to the downside filters.
  • Momentum oscillator RSI (14) has shifted into a bearish range of 20.00-40.00.

The US dollar index (DXY) has witnessed a steep fall after failing to sustain above the round level support of 103.00. The DXY plunged sharply after the Federal Reserve (Fed) announced its monetary policy on Wednesday. The asset printed its 19-year high at 103.93 and faced a tad longer consolidation has resulted in a bearish reversal.

The formation of a Symmetrical Triangle chart pattern at near 19-year high levels has turned into an intense sell-off for the asset. The downside break of a symmetrical triangle after a stellar bull run indicates inventory distribution in which institutional investors shift their inventory to retail participants.

The 20- and 50-period Exponential Moving Averages (EMAs) at 103.15 and 103.22, respectively, are sloping downwards, which signals more weakness ahead.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which indicates a fresh leg of weakness in the counter.

A pullback towards the 20-EMA at 103.15 will be an optimal selling opportunity for investors, which will drag the asset towards Wednesday’s low at 102.46, followed by the round level support of 102.00.

On the flip side, bulls could regain control if the asset oversteps Wednesday’s high at 103.61. Fulfillment of the same will force the asset to reclaim a 19-year high and the round level resistance at 103.94 and 104.00, respectively.

DXY hourly chart

Dollar Index Spot

Overview
Today last price 102.57
Today Daily Change 0.06
Today Daily Change % 0.06
Today daily open 102.51
 
Trends
Daily SMA20 101.4
Daily SMA50 99.59
Daily SMA100 97.78
Daily SMA200 95.89
 
Levels
Previous Daily High 103.61
Previous Daily Low 102.46
Previous Weekly High 103.94
Previous Weekly Low 101.06
Previous Monthly High 103.94
Previous Monthly Low 98.31
Daily Fibonacci 38.2% 102.9
Daily Fibonacci 61.8% 103.17
Daily Pivot Point S1 102.11
Daily Pivot Point S2 101.71
Daily Pivot Point S3 100.96
Daily Pivot Point R1 103.26
Daily Pivot Point R2 104.01
Daily Pivot Point R3 104.41

 

 

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