US dollar index set to keep going higher in channel
The US dollar is coming off channel support, with it pointed higher towards a potential run-in with the 100 mark.
US dollar technical outlook:
- US dollar index (DXY) maintaining upward tilt in long-term channel
- Thrust to cycle high could have the index trading back at 100
DXY maintaining upward tilt in long-term channel
The DXY hasn’t been a very volatile spot for traders to be, and that could remain to be true for a while longer as long as it stays within the upward channel in place since the middle of 2018. The low put in to start the year has the DXY continuing to head higher longer term.
If the pattern remains the same, then we should see the dollar continue to rally to a new cycle high here some time likely this quarter or early next at the latest. This could finally get the psychological 100 level in play, a level that hasn’t been seen in on almost three years.
The shorter-term technical landscape favours further upside as well, with the DXY having broken and successfully retested a trendline extending down off the last bullish cycle high created in October. The next hurdles though are close at hand, with a couple of minor swing highs from November in the vicinity.
A firm breakout above 98.54 will have the October 99.67 high in play, followed by 100. At this time, it will take a drop below 97.35 to bring the near-term constructive outlook into question. Traders can also use the developing channel off the 31 December low as a guide for structuring trades.
DXY weekly chart (channel keeps price pointed higher)
DXY daily chart (near-term constructive)
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