Dollar Index (.DXY) View


The US Dollar has been hovering at multi-year high levels since the US election on hopes that new Presidential policies will prove useful for the businesses in general thereby further stabilizing the economy (related factors like employment, inflation, growth et. al.). A close look at weekly chart, a steady range bound zig-zag traversal between say 92 and 100 levels is found. A spike to 103+ during late December can be considered as an outlier (from a statistical lense) given already multi-year peak flight, in 2016. RSI flattening in mid-ranges too indicates stabilizing interests in the buyers and sellers.

On daily chart, a head and shoulder pattern is seen forming. If the pattern does complete, we will see a short term rally up until 102 from current 100 key level and then a reversal. Reducing RSI indicates a pressure downwards, although fundamentals can be argued otherwise. Stocks / indexes already at record highs with reduced volumes and an inverse correlation between stocks and dollar could lead to .DXY push higher (not shown in the chart).

Lot of data releases on the look out this week. In addition a number of earnings awaited. Check the detailed economic and earnings calendar for exact schedule and possible moves resulting in trading opportunities for the Spot Dollar trades. Major currency pairs to have an impact accordingly.

#DXY

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