USDX technical analysis
The US Dollar index is still caught in a consolidation phase and the key 75.00 resistance has held price for now. There is a clearly defined support area forming around 73.40 which could be an important level heading into the new week.
Dollar Index Daily Chart
- There has been clear demand seen around 73.40. My previous post referenced this as “potentially holding price if seen again on a drop below 74.00”. This level did hold price and has now become a defined horizontal support level and should be monitored accordingly.
- A breakout below 73.40 would bring the 72.69 4/5/11 level into play and would be my first target on a break of the key support level.
- Further to a break below 72.69 the FE61.8% expansion of 81.53 > 72.79 >76.71 is aligned with the 13/7/2008 weekly low at 71.30. This confluence area could potentially see support and is the last major level before the 16/3/08 70.69 dollar index all time low.
- On the upside; 75.45 held as resistance on 5/8/11. This is the 61.8% Fibonacci retrace of 73.41 to 76.71.
- The 12/7/11 high at 76.71 is the next significant resistance level if a break of 76.00 transpires.
Price action at the 73.40 area is key heading into the new week. A sustained break below would bring the all time dollar index low of 70.69 into view for US dollar bears. Price is currently at 74.08 and a move back up to the 75.00 may well see a continuation of the recent range-bound trading. Overall positioning remains bearish.
Dollar Index Weekly Chart