Is the U.S. dollar done falling against its major counterparts?
The U.S. Dollar Index (DXY) is pointing to a ranging environment!
Check out what the 4-hour chart is telling us:
US Dollar Index (DXY): 4-hour
If you’re looking to trade USD pairs this week, you should know that the dollar might gain a pip or two (or a hundred) against its major counterparts this week.
Or not. It could depend on the overall market environment.
As far as technicals are concerned, the dollar is approaching a major support level on the 4-hour time frame. DXY is near the 103.50 zone that attracted enough bulls in mid-December and again at the start of the year.
Will the range support hold for another day? Or is third time the charm for USD bears?
Flatter simple moving averages (SMAs) on the 4-hour chart suggest that USD may be ranging rather than trending in the next couple of days.
Stochastic is a bit more specific, saying that DXY is currently “oversold” on the 4-hour time frame.
If this week’s U.S. inflation reports or Powell’s panel discussion in Stockholm point to the Fed sticking to its hawkish plans for the year, then USD could gain ground across the board.
DXY could bounce from its 103.50 range support and test the 100 SMA, 104.50 mid-range, or 106.00 range resistance levels.
But if this week’s market themes end up being good for risk-taking, then safe-haven USD would lose pips against its counterparts.
DXY could resume its decline and probably revisit its 102.50 or 101.70 previous areas of interest.
What do you think? Will DXY trend this week? Or will it stay inside a range?
