The main view of this trade idea is on the Daily Chart.
The Dollar Index (DXY) made a historical high of 114.78 on 28th September 2022. The Index then attempted to retest those highs and failed and then broke below trend solidly on 4th November 2022. DXY then proceeded to channel lower and at the time of writing, is now 10.93% lower from the September 2022 high. Expectations are for DXY to continue to channel lower and remain below trend, with a target of 94.50 for the Index. At the time of writing that is currently 7.54% lower from current levels. This view will be negated if DXY breaks above the upward trend channel as well as its moving average, closing above 107.50.
Technical Indicators
The Supertrend indicator, the Awesome Oscillator (AO), the Relative Strength Index (RSI) and the multiple timeframe Simple Moving Averages (SMAs) support this view. DXY’s Supertrend indicator is making lower highs and lower lows, with the most recent lower high seen on Friday 6th at 105.631 and the Index is currently attempting to secure a new intermediate low. The Supertrend indicator is in sell mode. The Awesome Oscillator has been negative since 27th October 2022 and is currently red, which indicators negative momentum. The RSI is below 50 and trending lower.
The intra-day trend following indicators of DXY also show downtrends in the 15-Min, 2-Hr, 4-Hr and Daily timeframes. Medium term resistance is observed around the 107.50 price level.
Recommendation
The recommendation will be to go short at market, with a stop loss at 107.50 and a target of 94.50. This produces a risk/reward ratio of 1.46.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes.
At the time of writing, I have exposure to DXY.
The Dollar Index (DXY) made a historical high of 114.78 on 28th September 2022. The Index then attempted to retest those highs and failed and then broke below trend solidly on 4th November 2022. DXY then proceeded to channel lower and at the time of writing, is now 10.93% lower from the September 2022 high. Expectations are for DXY to continue to channel lower and remain below trend, with a target of 94.50 for the Index. At the time of writing that is currently 7.54% lower from current levels. This view will be negated if DXY breaks above the upward trend channel as well as its moving average, closing above 107.50.
Technical Indicators
The Supertrend indicator, the Awesome Oscillator (AO), the Relative Strength Index (RSI) and the multiple timeframe Simple Moving Averages (SMAs) support this view. DXY’s Supertrend indicator is making lower highs and lower lows, with the most recent lower high seen on Friday 6th at 105.631 and the Index is currently attempting to secure a new intermediate low. The Supertrend indicator is in sell mode. The Awesome Oscillator has been negative since 27th October 2022 and is currently red, which indicators negative momentum. The RSI is below 50 and trending lower.
Recommendation
The recommendation will be to go short at market, with a stop loss at 107.50 and a target of 94.50. This produces a risk/reward ratio of 1.46.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes.
At the time of writing, I have exposure to DXY.