DXY: Is the Dollar Rally Over?

by Justin Bennett  · 

January 24, 2024

by Justin Bennett  · 

January 24, 2024

by Justin Bennett  · 

January 24, 2024

The US Dollar Index (DXY) is pulling back sharply today after testing the multi-year resistance at 103.50.

It’s no surprise to see the dollar pullback here, but is it structurally significant, and what does it mean for pairs like EURUSD and GBPUSD?

We discuss all of that and more in today’s video.

Watch the video below and scroll down for the annotated charts and analysis.

The DXY is pulling back today, sending pairs like EURUSD and GBPUSD higher.

We knew DXY 103.50 would be a significant hurdle for dollar bulls, given its role on the 12-month time frame since 2016.

Tuesday’s session tried to break above 103.50, but the daily close proved difficult for bulls.

As mentioned in Tuesday’s VIP-only video, the daily close didn’t quite flip 103.50 to support.

We need to see a convincing break above that region on the higher time frames, and Tuesday’s 103.53 close wasn’t enough.

So, is the dollar rally over?

It’s too soon to tell, but there’s nothing yet to suggest that’s the case.

As mentioned in previous videos, including Saturday’s Forex forecast, 102.60 is the must-hold level for DXY bulls.

I’ll stay bullish on the dollar while above that mark on the higher time frames.

However, 103.50 is the key to opening up levels like 104.20, a critical area for the DXY, as a sustained break above would flip the trend from bearish to bullish.

For now, the DXY is range-bound between 102.60 and 103.50, with 103.10 also serving as support on a daily basis.

I remain bullish on the US dollar while above 102.60 on a daily closing basis.

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