Dollar Index Analysis – USDX Technical Update

• The USDX has seen a high momentum move to the upside from the 79.21 weekly range low (previous daily highs from the 28th/29th March).  This comes after our previous dollar index update said that “any failure to hold at current levels may see a move down to the 79.32 area”.
• The week was heading for a lower USDX but the 60 pip (111% of the ADR) upside candle on Friday has taken the dollar index into positive territory on a W1 basis.  The weekly dollar index chart last week showed a bullish engulfing candle so the recovery on Friday was in-line with this price action reversal setup.
• Price is now, once again, heading for the 80.00 price pivot level. The bullish appearance and volatility represented on the daily candle from Friday looks to be a threat on this previous resistance area.
• This week has given an inside candle on the dollar index weekly chart (see the w1 chart below).  Any sustained move above this weeks high at 80.03 would add to the near to mid term bullish dollar index outlook and be a breakout above the inside bar.
• The EURUSD 1.3000 – 1.3030 zone is still the key technical area heading into next week.  Any break of this level could see an increase in volatility and would most likely coincide with a break of the USDX “inside week” to the upside.

Dollar Index W1

Dollar Index D1