The US Dollar Index (DXY) is currently hovering around 99.85-99.90, just nicking above that long-term uptrend line that has been holding price high since early March – but for how long? We’re still got a mildly bullish vibe going on, with those higher lows intact, but the enthusiasm is slowly draining out of the system after several attempts to break past that stubborn 100.50-100.65 ceiling.
Price is stuck in a bit of a limbo, sitting right around the 50-SMA, while the 200-SMA lurking below near 99.30 is still doing its job as a solid support zone. The RSI is slowly trickling down to the mid-40s – that’s a clear sign that the bulls are starting to lose their mojo and we could well see a short-term pullback on the cards.
If the DXY can somehow power through to a sustained break above 100.00-100.50, then we might be looking at some upside momentum toward 101.10 – but its a long shot. On the other hand, if price plummets below 99.50 – not entirely impossible, given the current mood – we could be in for a deeper correction toward 99.30 , and possibly even 98.90. If you’re looking to short, the best bet might be to do it below 99.50, targeting 99.00 and setting your stop-loss above 100.20.
