The dollar may have gained some of its gains tomorrow, but the coming weeks may prove to be more difficult
I am not a huge fan of the Dollar Index (DXY) in general, and if you look at the relative strength of the dollar, I closely follow the Bloomberg Dollar Index (BBDXY).
However, amid the fall of the dollar yesterday, it is achieving an interesting technical level on the Dollar Index (DXY) chart and it may be something to watch:
The dollar started the week on a weak basis, but rebounded slightly yesterday, with the price action of the 100-month moving average (red line) tested in the Dollar Index (DXY).
Note that the price has not broken strongly from any of its major monthly moving averages since 2014. In short, this represents a major technical test for the dollar.
Now, one of the reasons I don’t fully envision the Dollar Index (DXY) is because it’s a big reversal of the EUR / USD pair, given how weighted it is. let’s take a look:
The general trend on both charts is largely the same and we can also see the EUR / USD pair near the 100-month moving average (red line) but in this case, it trades above the August breach of major technical levels. Used to be.
We now see this level at 1.1867 and staying above this should boost a faster pace for buyers during the last few months of trading.
The weakness of the dollar could be a topic that could escalate for many years to come as the Fed sent a strong message to stay down from the race last week.
Another decline in key technical levels will continue this message for a longer period of time, so be aware of the above levels as they are likely to be of greater importance in determining the direction for the dollar to move forward.