USD Sell-off Sinks to Multi-Month Lows

23 juliUS Dollar declines eleven of the beyond 14 days- breaks multi-month uptrend / lows
USD technical guide hurdle now in view- chance for rate inflection withinside the days in advance
Resistance 104.08, ~104.40, 104.90s (key)- Support 103.49/60, 102.74/99 (key), 102.35
The US Dollar Index has plunged for eleven of the beyond 14 days (nowadays could entire 12) with a 3rd weekly decline taking DXY closer to preliminary technical guide. While the medium-time period outlook stays weighted to the downside, we're in search of viable rate inflection into fashion guide simply decrease withinside the days in advance for guidance. Battles traces drawn at the DXY short-time period technical charts into the near of the month.

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Technical Outlook: In final month`s USD Short-time period Outlook, we mentioned that USD become drawing near resistance at multi-week highs and that, “losses be restrained to the 200-DMA IF rate is heading better in this stretch with a near above 105.seventy one had to gas the subsequent leg in rate. Note that losses underneath 104.15 may want to see matters crumble alternatively quickly- tread gently on a take a look at of this guide IF reached.” The index rallied some other 0.8% withinside the following days with DXY reversing off the 2023 excessive-week near (HWC) at 106.10 into the near of June (intraday excessive registered at 106.13).

23 juli

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Notes: A closer look at USD price action shows DXY trading within the confines of a descending pitchfork (blue) with an embedded channel (red) guiding the July decline. Weekly open resistance stands at 104.08 and is backed closely by the 200DMA (currently ~104.40). A break of the weekly opening-range highs would expose a possible rally towards the highlighted trendline confluence near 104.90s – rallies should be limited by this slope IF price is heading lower on this stretch. Broader bearish invalidation now set to the 61.8% retracement of the recent decline.

A break / close below this pivot zone would expose the next major technical confluence at 102.74/99- a region defined by the March low-day close (LDC), the 61.8% Fibonacci retracement of the December rally, the 2016 high-close (HC) and the 2020 high. Note that slope support also converges on this threshold over the next few weeks- look for a larger reaction there IF reached. Losses below this threshold could fuel another bout of accelerated declines towards the March low at 102.35 and the objective yearly open near 101.41.