U.S dollar index long-term technical analysis

The Fed’s commitment to supply the market with unlimited funds put the U.S dollar index under rocky movement. Last month the index fell to as low as 94.65 before it spring upside to as high as 102.99. The market interpreted the action as a panic situation, however, there was easing in coronavirus cases which brought the index higher again.

This month, the rocky situation might continue. The increase of total cases and death tolls of coronavirus continues accelerating across the world which means there will be not much change in the U.S dollar index yet.

New Month

Monthly chart

Last month is a rocky month for the U.S dollar index. The index whipsawed up and below the channel range. However, at the end of the month, the index settled inside the channel range. This month, the index attempted to continue moving upward. However, the upward movement rejected from the top of the channel.

Will the index move lower and target the bottom of the channel?

Weekly chart

It might be the time for the bear now as the U.S dollar index shows bearish rejection from the top of the channel. This week, if the index moves lower it might reach 98.25 or the bottom of the channel. We expect the index to maintain its bullish trend inside the channel for now.

Daily chart

The bear brought the U.S dollar index down but it managed to bounce from the level near SMA 200 and 98.40. At the current time, the index upward movement reaches an obstacle and the index fell below 100.00 handles. Will we see a bullish bounce from the 99.40? Alternatively, will the index continue lower and retest the 98.40?

Trade plan (For U.S dollar pair)

The long-term view of the index is bullish but it is currently under pressure and testing the 99.40 support level. The index may continue lower before it could turn bullish again.

Traders will continue to hold long positions assuming the index will test the bottom of the channel and bounce from it.