- On the weekly chart, the US Dollar Index (DXY) has been trading sideways since early 2015.
- DXY has formed a head-and-shoulders pattern over the last 4 years. In 2018, DXY equally formed a nested head-and-shoulders pattern with the price now below the 200-weekly simple moving average. DXY also found resistance at a trendline resistance from January 2017. The RSI indicator is still above the 50 line while the MACD has turned slightly bearish. The Stochastic oscillator is below 50 signifying weakness.
- The 93.81 level (September 21 swing low) is the key support for bears as a break below would create a lower low and reinforce the bearish case.
- Alternatively, a break above 96.00 would be seen as a strong bullish signal and open the doors to the 2018 high and potentially way beyond (as the bulls would have invalidated the 2018 head-and-shoulder).
DXY weekly chart
Spot rate: 95.00
Relative change: -0.46%
Resistance 1: 95.24 July 13 high
Resistance 2: 95.52 August 6 high
Resistance 3: 95.65 July 19 high (key level)
Resistance 4: 96.41 August 20 high
Resistance 5: 97.00 current 2018 high
Support 1: 95.00 figure
Support 2: 94.91 July 27 high
Support 3: 93.81 September 21 swing low (key level)
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