- The US Dollar Index advances for two days, forming a “morning star” candle chart pattern.
- Oscillators paint a mixed picture, though RSI could be turning bullish.
- A daily close above 103.26 will pave the DXY’s way to test 104.00
The US Dollar Index (DXY), which tracks a basket of six currencies against the US Dollar (USD), advances 1.58% after hitting a 7-week low of 101.91. At the time of writing, the DXY is trading at 103.12 after hitting a daily low of 102.50.
US Dollar Index Price action
From a daily chart perspective, the DXY is neutrally biased, as it remains above the 2023 low of 100.85. In addition, the US Dollar Index pierced the last higher-high (HH) of 105.63 and printed a YTD high at 105.88. In addition, a candlestick chart pattern, “morning star,” it’s forming, which could pave the way to test the daily Exponential Moving Averages (EMAs) sitting at around 103.782.
For a bullish resumption, the DXY must achieve a daily close above the March 22 high at 103.26. Once done, the DXY could test the confluence of the 20-day EMA and 2017 high at 103.78. If that strong resistance area is broken, the 50-day EMA at 103.97 is up for grabs, ahead of 104.00.
Otherwise, buying weakness could mean that the ongoing leg-up is a correction of a continued downtrend. That said, the US Dollar Index’s first support would be 103.00. A breach of the latter will expose the March 23 swing low at 101.91, followed by the YTD low at 100.85.
Oscillators, like the Relative Strength Index (RSI), are tracking the trend, though it remains bearish. Contrarily, the Rate of Change (RoC) shows that sellers’ momentum is waning, about to turn neutral.