June 3, 2023

Falling wedge confirmation favors DXY bulls above 96.00

  • US Dollar Index pares biggest daily jump in two weeks.
  • Confirmation of bullish chart pattern, firmer MACD signals favor buyers
  • 200-SMA, six-week-old resistance line guard immediate upside.
  • Horizontal area from November 18 adds to the downside filter.

US Dollar Index (DXY) seesaws around 96.17, down 0.05% intraday during early Tuesday after rising the most in two weeks the previous day.

The greenback gauge’s heavy run-up on Monday crossed a two-week-old resistance line, which in turn confirmed a falling wedge bullish chart pattern. Adding to the upside bias are the bullish MACD signals.

However, a convergence of the 200-SMA and 23.6% Fibonacci retracement (Fibo.) of November’s upside, near 96.20, restricts the quote’s immediate upside.

Following that a descending resistance line from November 24, close to 96.55, will be the key for DXY bulls to watch.

Meanwhile, pullback moves may aim for the previous resistance line, part of the wedge, near 96.00, a break of which will direct the bears towards 38.2% Fibo. level close to 95.77.

It should be noted, however, that a horizontal area surrounding 95.50-55, comprising the wedge’s support line and multiple lows marked since late November, appears a tough nut to crack for the US Dollar Index bears.

DXY: Four-hour chart

Trend: Further upside expected


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