US Dollar Index Price Analysis: DXY bulls battle seven-week-old resistance line
- DXY extends Friday’s run-up amid US Senate passes one-day stopgap funding with nearly final covid stimulus.
- 10-day SMA adds strength to the immediate upside hurdle.
- Bears can re-enter on the downside break below 90.00.
US Dollar Index (DXY) takes the bids near 90.45, up 0.50% intraday, during early Monday. The greenback gauge bounced off the lowest since April 2018 last Friday amid hopes of the US coronavirus (COVID-19) aid package as the current budget funding reached near expiry.
During the weekend, policymakers at Capitol Hill finalized the details of the much-awaited covid stimulus but couldn’t announce it formally as Sunday ends. However, the Congress members managed to avert the government shutdown while passing a one-day stopgap funding bill.
Read: S&P 500 Futures wobble around 3,700 as US stimulus news combat Brexit, virus woes
In a reaction, the US dollar extends Friday’s recovery moves while battling a downward sloping trend line from November 04 as well as 10-day SMA, around 90.49/53.
While upbeat fundamentals are likely to support the greenback buyers to cross the 90.53 immediate hurdle, a 21-day SMA near 91.07 will challenge the quote afterward.
Alternatively, the 90.00 threshold restricts the sellers’ entries ahead of the recent multi-month low of 89.72.
In a case where the DXY drops below 89.72, April 2018 low near 89.22 will lure the bears.
DXY daily chart
Trend: Further recovery 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.
