Technical Analysis – Dollar index pauses rebound due to overbought conditions
May 29, 2023 3:27 pm
The US dollar index (June Futures) has been in a steady recovery after bouncing off the one-year low of 100.44 in April. Nevertheless, the recent advance has stalled in the last couple of daily sessions, hinting that the index has reached overbought conditions.
The momentum indicators currently suggest that buying forces are strengthening near their overbought territories. Specifically, the MACD is posting consecutive multi-month highs above both zero and its red signal line, while the RSI has flatlined around the 70-overbought mark.
Should positive momentum intensify further, the price could ascend towards the 2023 peak of 105.46, which overlaps with the 200-day simple moving average (SMA). Conquering this barricade, the bulls could aim at the 107.86 barrier before 110.50 appears on the radar. Jumping above the latter, the dollar index could then test the November 2022 high of 113.00.
On the flipside, if bearish forces remerge and put an end to the recent rebound, the December 2022 low of 103.00 could be the initial obstacle for the price to overcome. Dipping below that level, the index could decline towards 102.36, which has served as both support and resistance in 2023. Further downside moves could then cease at the one-year low of 100.44 observed in April.
Overall, the US dollar index appears to be in a recovery phase despite the temporary pause in the last couple of daily sessions. That being said, for the short-term picture to turn bullish, the price needs to jump above its 200-day SMA.
The US dollar index (June Futures) has been in a steady recovery after bouncing off the one-year low of 100.44 in April. Nevertheless, the recent advance has stalled in the last couple of daily sessions, hinting that the index has reached overbought conditions.
The momentum indicators currently suggest that buying forces are strengthening near their overbought territories. Specifically, the MACD is posting consecutive multi-month highs above both zero and its red signal line, while the RSI has flatlined around the 70-overbought mark.
Should positive momentum intensify further, the price could ascend towards the 2023 peak of 105.46, which overlaps with the 200-day simple moving average (SMA). Conquering this barricade, the bulls could aim at the 107.86 barrier before 110.50 appears on the radar. Jumping above the latter, the dollar index could then test the November 2022 high of 113.00.
On the flipside, if bearish forces remerge and put an end to the recent rebound, the December 2022 low of 103.00 could be the initial obstacle for the price to overcome. Dipping below that level, the index could decline towards 102.36, which has served as both support and resistance in 2023. Further downside moves could then cease at the one-year low of 100.44 observed in April.
Overall, the US dollar index appears to be in a recovery phase despite the temporary pause in the last couple of daily sessions. That being said, for the short-term picture to turn bullish, the price needs to jump above its 200-day SMA.
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