DXY: What’s Next for the Dollar?

The dollar had its largest weekly gain last week since February, and carved its first higher high since early March.

Despite heavy criticism, I was cautiously bullish the dollar throughout April, and my bullish bias has only increased in May.

On Monday, I wrote how the US Dollar Index (DXY) 102.12 had flipped to support, and Tuesday bounced from 102.20.

So what’s next for the dollar?

While nobody knows what’s next for any market, I continue to think the DXY is heading back to the 105.60 range highs.

But first, bulls will face a significant test at the 103.50 yearly open.

We may see a pullback from this region, given the significance on the higher time frames.

That lines up with support areas like 1.0750 on the EURUSD chart.

But regardless of whether we get a pullback from the dollar, the recent price action combined with the 100.80 to 105.60 range leaves me thinking we see the dollar higher later this year.

Alternatively, a daily close below the 102.00 area would invalidate the bullish outlook, but 100.80 is the critical level for DXY bulls.

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