US Dollar technical forecast: USD bulls eye resistance

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By :  ,  Sr. Technical Strategist

US Dollar Index technical forecast: DXY weekly trade levels

  • US Dollar Index marks fourth-consecutive weekly advance
  • USD monthly reversal off key support now approaching critical resistance
  • DXY resistance 105.73-106.15 (key), 108.09, 109.45– support 103, 1.1632/44 (key),

The US Dollar Index charged higher into the close of the week with DXY marking its fourth-weekly advance. The rally comes off an early-month reversal from key support with the index now approaching a critical technical confluence- bulls on notice. These are the updated targets and invalidation levels that matter on the DXY weekly technical chart.

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US Dollar Index Price Chart – DXY Weekly

US Dollar Index Price Chart - DXY Weekly Chart - USD Technical Forecast

Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView

Technical Outlook: The US Dollar Index posted an outside-weekly reversal off confluent support into the start of February with the index rallying more than 4.4% off the lows. While a breach above the 52-week moving average / 1999 highs does keep the risk weighted to the topside, the advance may be vulnerable heading into downtrend resistance (blue).

The zone in focus is eyed at 105.73-106.15 – a region defined by the 100% extension of the monthly advance, the December / January swing highs and the 38.2% Fibonacci retracement of the September decline. A topside breach / weekly close above this threshold is needed to mark resumption towards subsequent resistance objective at the 2001 low at 108.09 and the 61.8% retracement at 109.45.

Initial weekly support rests with the objective yearly-open at 103.49 backed by the 2016 high-close / 2023 low-week close at 103- losses should be limited to this threshold IF the Dollar is going to attempt a breakout of the multi-month downtrend. A pivot below this level would threaten another test of broader uptrend support, currently near ~101.40s.

Bottom line: The US Dollar rebound may be vulnerable in the days ahead as the index approaches a major pivot zone. From a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a rally towards 106 – losses should be limited by the yearly open IF price is heading higher on this stretch. I’ll publish an updated US Dollar short-term outlook once we get further clarity on the near-term DXY technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist with

Follow Michael on Twitter @MBForex

Related tags: DXY USD Michael Boutros

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