Can the US Dollar Index (DXY) hold onto critical support at 100.80?
Or will the index signal further dollar weakness as we begin a new year?
In today’s video, we’ll discuss key levels and likely scenarios for the dollar index so you’re better prepared to trade the major currency pairs in 2024.
Watch the video below and scroll down for the annotated charts and analysis.
The DXY is resting on critical support this week at 100.80.
It’s a significant area for the dollar, given the role it played throughout 2023.
Specifically, 100.80 triggered the bounce in early February, and served as support again between April and May.
With that in mind, it would be surprising if dollar bulls gave up 100.80 without a fight.
It seems more appropriate that we get some ranging price action between 100.80 and 101.90 as we head into 2024.
Of course, anything is possible, especially with the lack of liquidity this time of year.
A critical factor for DXY bulls in 2024 will be whether or not they can reclaim the 102.00 region.
It’s a key horizontal level and the trend line from the May 2021 low.
We saw the DXY pause here for a few days recently, but the level failed on December 27th.
If the index can reclaim that 102.00 region as support, it would signal dollar strength in early 2024.
But if it holds as resistance and the DXY loses 100.80 over the coming days, it would signal further dollar weakness toward 99.60.
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