Saturday, 24 August 2019 05:49 GMT
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US Dollar Price Outlook: DXY Threatens Larger Recovery Trade Targets




(MENAFN - DailyFX) US Dollar price recovery testing near-term resistance pivot- broader risk lower sub-98.40 Check out our 2019 projections in ourFree DailyFX USD Trading Forecasts Join Michael for Live Weekly Strategy Webinars onMondays at 12:30GMT

TheUS DollarIndex turned just ahead of uptrend support last week with the recent rebound threatening larger recovery in price. These are the updated targets and invalidation levels that matter on theDXYcharts heading into the close of the week.Review this week's Strategy Webinarfor an in-depth breakdown of thisoilprice setup and more.

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US Dollar Price Chart – DXY DailyUS Dollar Index Price Chart - DXY Daily - USD Technical Outlook

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

Technical Outlook: In my latestUS Dollar Weekly Price Outlookwe noted that, 'DXY turned from big resistance last week and IF this pullback is the start of a larger correction, look for resistance ahead of 97.87.' Price turned just ahead of confluence support last week with the rebound now trading within the 97.71/87 resistance zone- look for a reaction here.

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US Dollar Price Chart – DXY 120minUS Dollar Index Price Chart - DXY 120min - USD Technical Outlook

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

Notes: A closer look at DXY price action shows the index trading within the confines of a broad ascendingpitchfork formationextending off the June lows with the weeklyopening-rangenow taking shape just below the confluence resistance at 97.87- a region defined by the 61.8% retracement of the 2017 decline and the 38.2%retracementof the August range.

A breach above this region would expose topside resistance objectives at 98.07/12 backed by the median-line / 61.8% retracement at 98.27- look for a reaction there IF reached. Ultimately a topside breach / close above the yearly high-day close at 98.40 would be needed to mark resumption of the broader up-trend. Support steady at the 97.21 with a break below 97.02 needed to suggest a more significant high was registered this month. Such a scenario would have us targeting initial support objectives at 96.52.

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Bottom line: The US Dollar is testing near-term resistance here – IF broken, look for a larger recovery towards the median-line / uptrend resistance. From a trading standpoint, a good place to raise protective stops – ultimately, a larger recovery would have us looking for possible exhaustion / favorable short-entries on a stretch higher towards 98.27.

For a complete breakdown of Michael's trading strategy, review hisFoundations of Technical Analysis series on Building a Trading Strategy

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- Written byMichael Boutros , Currency Strategist with DailyFX

Follow Michael on Twitter@MBForex

DailyFX

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US Dollar Price Outlook: DXY Threatens Larger Recovery Trade Targets

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