US Dollar Index Price Analysis: DXY battles 50-DMA amid hidden bullish RSI divergence
- DXY consolidates the biggest daily loss in six weeks.
- RSI divergence, failures to drop beneath 50-DMA keep buyers hopeful.
- 21-DMA guards immediate upside, rising trend line from May becomes crucial support.
US Dollar Index (DXY) licks its wounds around 95.85, up 0.11% intraday during early Monday.
The greenback gauge dropped the most since mid-November on Friday’s mixed readings of the US jobs data for December. However, the prices mismatch with the RSI and join the repeated failures to break the 50-DMA to favor the bulls.
Hidden bullish RSI divergence can be portrayed by the higher lows of the prices and lower lows of the RSI line. These are the conditions witnessed during the DXY moves of late November and December.
Hence, the latest rebound is likely to extend towards the 21-DMA resistance level surrounding 96.15. Though, the monthly peak of 96.46 and multiple hurdles below the 97.00 threshold will challenge the US Dollar Index upside afterward.
On the contrary, a sustained trading below the 50-DMA level of 95.83 will direct DXY towards an ascending support line from May, near 95.00 by the press time.
Should the quote drop below 95.00, the short-term bullish trend is likely to have waned.
DXY: Daily chart
Trend: Further advances expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
