US Dollar Index holds support, for now: DXY, NZD/USD, USD/CAD

Close-up of bank notes in different currencies
Joe Perry
By :  ,  US Market Analyst

The US Dollar Index is bouncing!   Yesterday, as we were looking for a possible pullback in EUR/USD ahead of the ECB meeting and EU Summit tomorrow, we noted that the DXY had moved into a support zone between 89.00 and 91.00 and that price was diverging from the RSI.  Today, price has bounced out of that area and the RSI is back in neutral territory.  

DXY

A one-day move shouldn’t define a reversal of trend, however, there are some levels to watch on the upside if this move does try and push higher.  The lows from September 1st at 91.75 is the first level to watch of resistance to watch. Next resistance is at the 38.2% Fibonacci retracement level from the November 20th highs to the December 4th lows, near 91.96, then horizontal resistance near 92.18.

Market chart analysis of the DXY daily. Published in December 2020 by FOREX.com

Source: Tradingview, FOREX.com

NZD/USD

NZD/USD has had a strong move higher lately.  On a 240-minute timeframe, the pair broke higher out of a channel and quickly moved to target near 0.7100, where price formed a shooting star and began consolidating.  Resistance now sits at the December 1st highs near 0.7104.  Horizontal support is at December 7th lows and horizontal support near 0.7000.  Below there, look for horizontal support near 0.6914. For the trend to reverse, price would have to break back below the channel breakout point at 0.6800.

Market chart analysis of the New Zealand vs U.S Dollar. Published in December 2020 by FOREX.com

Source: Tradingview, FOREX.com

USD/CAD

USD/CAD is another US Dollar pair that has had a strong move lately.  The pair stalled its move lower at not only the previous lows from October 2018, but also the 161.8% Fibonacci retracement level from the lows on November 9th to the highs on November 13th, near 1.2767.  A bounce above the November 9th lows at 1.2928 and the psychological 1.3000 round number level are needed to confirm a reverse in trend.

Market chart tracking USD to CAD daily. Published in December 2020 by FOREX.com

Source: Tradingview, FOREX.com

Although many of the US Dollar pairs are showing decent signs of a possible reversal today, price still must continue moving in today’s direction for it to be a reversal of the trend!

Related tags: DXY CAD Forex NZD

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