The Technical Tide Favours USD Bulls This Week
The US Dollar Index wrapped up last week a whisker south of session tops, adding +0.8% and extending January’s recovery. Month to date, the unit is +1.8% in the green and has reclaimed the entire portion of December’s downside.
Monthly Timeframe
Technical observations on the monthly timeframe are largely unchanged from previous writing (and will likely remain so in Q1). Structures worth monitoring are support at 99.67 (backed up by a moderate Fibonacci cluster nearby at 98.72) and October’s (2023) peak at 107.35 as a possible resistance, with a breach here exposing another layer of resistance at 109.33.
It is important to underline that the monthly timeframe displays a clear view of the longer-term trend, which, despite lacklustre movement since early 2023, is north alongside momentum remaining just above positive (> 50.00), as per the Relative Strength Index (RSI).
Daily Structure: Bulls Beginning to Make a Show
As evident from the daily chart, buyers and sellers ended the week squaring off around the underside of the 200-day simple moving average (SMA) at 103.46, located south of tested resistance at 103.62. Regarding price structure, the recent push higher—Tuesday’s move that engulfed resistance at 102.92 and the 50-day SMA at 102.94—has signalled an uptrend (higher low followed by a subsequent higher high), with scope for the Relative Strength Index (RSI) to continue elbowing higher until overbought territory (70.00). Do note, nonetheless, that a Death Cross formed at the beginning of the year (50-day SMA crossing below the 200-day SMA), signalling a longer-term downtrend.
Dollar Bulls Favoured This Week
Technical evidence is largely in favour of buyers this week, supported by the following: the long-term trend is to the upside on the monthly scale, and the daily timeframe’s trend is also showing signs of reversing north, in addition to the RSI indicators on both the monthly and daily timeframes favouring buyers at the moment (daily is also north of 50.00). This could support a move beyond the 200-day SMA/daily resistance (103.62) this week to aim for 104.15 resistance on the daily. An alternative scenario, of course, is a modest correction to form on the daily chart that connects with support at 102.92, which draws in dip-buying interest.
Monthly Timeframe
Technical observations on the monthly timeframe are largely unchanged from previous writing (and will likely remain so in Q1). Structures worth monitoring are support at 99.67 (backed up by a moderate Fibonacci cluster nearby at 98.72) and October’s (2023) peak at 107.35 as a possible resistance, with a breach here exposing another layer of resistance at 109.33.
It is important to underline that the monthly timeframe displays a clear view of the longer-term trend, which, despite lacklustre movement since early 2023, is north alongside momentum remaining just above positive (> 50.00), as per the Relative Strength Index (RSI).
Daily Structure: Bulls Beginning to Make a Show
As evident from the daily chart, buyers and sellers ended the week squaring off around the underside of the 200-day simple moving average (SMA) at 103.46, located south of tested resistance at 103.62. Regarding price structure, the recent push higher—Tuesday’s move that engulfed resistance at 102.92 and the 50-day SMA at 102.94—has signalled an uptrend (higher low followed by a subsequent higher high), with scope for the Relative Strength Index (RSI) to continue elbowing higher until overbought territory (70.00). Do note, nonetheless, that a Death Cross formed at the beginning of the year (50-day SMA crossing below the 200-day SMA), signalling a longer-term downtrend.
Dollar Bulls Favoured This Week
Technical evidence is largely in favour of buyers this week, supported by the following: the long-term trend is to the upside on the monthly scale, and the daily timeframe’s trend is also showing signs of reversing north, in addition to the RSI indicators on both the monthly and daily timeframes favouring buyers at the moment (daily is also north of 50.00). This could support a move beyond the 200-day SMA/daily resistance (103.62) this week to aim for 104.15 resistance on the daily. An alternative scenario, of course, is a modest correction to form on the daily chart that connects with support at 102.92, which draws in dip-buying interest.
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