Today I’m going to show you why the US Dollar Index (DXY) should offer more opportunities next week.
I’ll share the two levels I’m watching for a breakout next week, and my long-term target for the dollar.
Watch the video below and scroll down for the annotated charts and analysis.
Markets were less than idea this week with the majority moving sideways with no clear resolution.
The primary reason for that is the US dollar’s lack of direction since breaking above 105.60.
The DXY is my barometer for most markets, especially equities and, of course, major currency pairs like EURUSD and GBPUSD.
So when the DXY is sideways, most markets are sideways.
We’ve seen that from currency pairs like EURUSD and GBPUSD.
However, the DXY chart, particularly the 4-hour time frame, suggests that we may not have to wait much longer for a breakout.
And to be clear, a “breakout” for the DXY could still go either way.
That said, the dollar has trended higher since July, and the DXY is still above the 105.60 key level.
That’s the one we continue to monitor in the VIP group as a must-hold level for dollar bulls.
I think a sustained break below 105.60 would be a serious and potentially deterimental setback for continued dollar strength this year.
But if we get a sustained break above the October trend line near 106.50, all eyes will be on the recent 107.20 highs.
I’ve maintained for months that the DXY is likely heading toward the 109 to 110 imbalance.
The question is, do we get a deeper correction before that, or was 105.60 the last buying opportunity before the next leg up?
The two trend lines, along with 105.60 and 107.20, should provide some answers next week.
Get Lifetime Access to Our Trading Group for daily analysis videos, see Justin Bennett’s trades in real-time, receive exclusive trade setups throughout the day, and access over 1,000 other forex and crypto traders. Last chance to join at a ridiculously low price. Offer ends October 31st!