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Technical Analysis – Dollar index builds base; bulls eye 102.50
May 16, 2023 2:27 pmVideo
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The US dollar index (futures) rose marginally above the 102.10 border after a month of unsuccessful efforts to stall again near the support-turned-resistance trendline from May’s 2021 lows.
The index created a bullish double bottom pattern around 100.44, increasing optimism that the downtrend from September’s peak of 114.71 is near the end. Meanwhile, the RSI and the MACD are promoting the bullish scenario too, as the former is trending northwards above its 50 neutral mark and the latter is set to enter the positive territory.
Hence, buyers will be waiting for a clear close above the trendline at 102.50 before targeting the 103.65 region. Slightly higher, the 38.2% Fibonacci retracement of the 89.49-114.70 uptrend at 105.00 could be the next challenge ahead of the 200-day simple moving average (SMA) at 105.60.
In the event the index slips back below the 102.10 barricade, which overlaps with the 50% Fibonacci level, it may initially pause within the 101.50-101.00 zone and then ease towards the key 100.44 floor. A decisive close below the latter point could prompt a fast decline to 99.45. Even lower, the sell-off may expand to the 61.8% Fibonacci of 97.55.
Summing up, the US dollar index seems to have built a strong floor for its next bullish wave. A sustainable extension above the 102.50 resistance is now required to activate fresh buying pressures.
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