US Dollar Technical Price Outlook: DXY Short-term Trade Levels

  • US Dollar updated technical trade levels – Daily & Intraday Charts
  • USD rebounds ahead of uptrend support- focus is on a breakout of August range
  • DXY weekly support 104.88, 103.69/82, 103 – Resistance 106.56, 107.52, 108.09

The US Dollar Index is on the offensive early in the week with DXY surging more than 0.65% on Monday. The rally takes the index back towards resistance at the August range highs and we’re on the lookout for a potential breakout for guidance in the days ahead. These are the updated technical targets and invalidation levels that matter on the US Dollar Index price charts. Review my latest Strategy Webinar for an in-depth breakdown of thisDXY technical setup and more.

US Dollar Index Price Chart – DXY Daily

US Dollar Index Price Chart - DXY Daily - USD Short-term Trade Outlook - Dollar Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; US Dollar Index on Tradingview

Technical Outlook:In our last US Dollar Index Technical Forecast we noted, “weekly support is now seen at the July monthly open / 1999 high at 104.77/88 – an area of interest for possible downside exhaustion IF reached.” DXY turned off lateral support / just ahead of the yearly uptrend last week at and the rebound keeps the focus on a breakout of the August opening-range for guidance. Ultimately, a topside breach / close above the yearly high-day close at 108.63 is needed to mark resumption of the broader uptrend towards the yearly high (109.29) and 110.25.

US Dollar Index Price Chart – DXY 240min

US Dollar Index Price Chart - DXY 240min - USD Short-term Trade Outlook - Dollar Technical Forecast

Notes: A closer look at DXY price action shows the index trading within the confines of a proposed ascending pitchfork formation extending off the monthly lows. Its too early to rely on this slope just yet, but the focus remains on support ahead of the weekly open at 105.67on pullbacks IF price is heading higher on this stretch. A topside breach of the monthly range would expose subsequent resistance objectives at the 61.8% Fibonacci retracement of the July decline at 107.51 backed by the 2001 low at 108.09 – both levels of interest for possible topside exhaustion / price inflection IF reached.

Near-term bullish invalidation set to 104.88– a break / close below this threshold would threaten a larger correction in the Dollar with such a scenario exposing the 38.2% retracement of the yearly range / 2017 high at 103.69/82.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: The US Dollar Index has set the monthly opening-range just above uptrend support- we’re on breakout watch. From at trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 106.56- losses should be limited to the weekly open IF price has more on this stretch. Review my latest US Dollar Index Weekly Price Outlook for a closer look at the longer-term DXY technical trade levels.

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— Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex

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