U.S dollar index long-term technical analysis

Coronavirus situations around the world caused slowdown and there is no end yet to the pandemic. Central banks across the world reacted with a massive stimulus which helps to boost the economy. However, the massive stimulus triggers flight from paper assets to safe-haven assets. We could see gold prices spiked to all-time high and creating records.

The only way to solve the current situation is discovery of effective coronavirus vaccine. If more stimulus introduces then the U.S dollar index is expected to continue under pressure.

New Month

Monthly chart

U.S dollar index sharply lower last week, fell from 97.50 to close near 93.00. The index continues its bearish pressure this month but it gets supported near the orange box area. If the index could maintain the positions above the orange area this month then there is a chance the index could move higher to test 94.00 and 95.00.

On the other hand, a bearish close below the area will trigger further selling toward 88.25 and the monthly SMA 200.

Weekly chart

Last week, the index formed a bullish pin bar pattern and suggesting possible bullish bounce. This week, there is no breakout confirmation above the pattern yet. Traders will wait for the close above the pattern high for bullish confirmation toward 94.00 and 95.00.

Daily chart

On the daily chart, the index supported near 92.00 – 92.60. At the current time, the index trading at 93.00 and waiting for further reaction. If the index could stay above 93.00 by the end of the week then we will have a bullish week for the U.S dollar index.

Trade plan (For U.S dollar pair)

The bearish pressure on the U.S dollar index has not receded yet. This month, the index supported by the orange area but the month has not closed yet. If the index could continue to maintain the positions above the orange area then there is a chance for a bullish bounce next month.

On the upside, 94.00 and 95.00 is the upward target.