US Dollar Price Analysis: DXY bulls and bears battle it out at a critical juncture

DXY bears camped below 102.20 critical resistance.
Bulls eye a break of the 50% mean reversion level to open risk to an upside correction.

Ross J Burland FXStreet

The US Dollar was pressured on Thursday in non-directional markets but was weighed by US disinflationary data despite hawkish rhetoric from the Federal Reserve officials.

Technically, the US Dollar, as measured by the DXY index, is now at a crossroads as the following hourly chart will illustrate:

DXY H1 chart

The price is bopping along the support with eyes on a test of the 38.2% Fibonacci level of the prior bearish impulse and a 50% mean reverison thereafter that meet the neckline of the M-formaiton. This resides at 102.20 and will be important for the development of the trajectory for the end of the week. A break there opens the risk of a move into the trendline resistance near 102.50 while failures open the risks of a significant downside continuation.

DXY daily chart

A move lower at this juncture opens risk of a break of the 101.30s swing lows as per the daily chart and the fake out that would have trapped US dollar bulls in the forex space.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD tests key moving averages as growth downgrade weighs

GBP/USD was nearly flat on Wednesday, edging up 0.08% to settle around 1.3370 in a quiet session. The pair has fallen sharply from its late-January high near 1.3870 and is now testing the 200-day Exponential Moving Average, with this week's one-week forex heatmap showing Pound Sterling as one of the worst performers against the US Dollar, down about 1.4% on the week.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.