DXY LOOKING LOWER STILL IN ABSENCE OF SUPPORT
Paul Robinson, Strategist
The US Dollar Index (DXY) has been soft the past two weeks, selling off in a steady manger. That may be set to continue as evidence of a turnaround is absent. The past few sessions price has been stuck under the 200-day MA.
The moving average is becoming an increasingly important ceiling for short-term traders to watch despite its long-term nature. As long as the DXY keeps failing around the average the trading bias remains neutral at best to lower.
Looking lower, there isn’t substantial support until the March low at 91.30. There was a couple of lows forged around this point, so it would be a level to give plenty of respect to should price sink to that point.
More broadly speaking, the turn from the March 31 high could be a rather significant high if further downside traction is gained. Within the content of the past year the trend has been lower and the rally off the February low may have only been a corrective move.
If this is the case, the March low would only be a stopping point for prices to continue to the January 89.20 low and worse. To turn the picture around from here, a push above the 200-day will first need to take place followed by stabilization. For now, running with a downward bias until further evidence suggest it’s prudent to do otherwise.