U.S dollar index long-term technical analysis

The trend of U.S dollar index started to switch from bullish to bearish in the previous month after the index tumble from 97.50. It was a situation supported by either technical and fundamental side. From the fundamental side, The fed sounded extremely dovish in the latest FOMC meeting. The market currently expects the Fed will cut interest rate in the next meeting.

We have positive development in trade war situation between the U.S and China. At the start of this month, both parties agreed to cease trade war and restart trade talks. If both parties could reach an agreement then it might contribute to further U.S dollar weakness.

New Month

Monthly chart

U.S dollar index was under pressure in the previous month. The index rejected from resistance 97.50 and closed near 96.10 support level. At the start of this month, the index attempted to bounce from 96.10 support level and currently traded near 96.70. Will the index add further gain and continue its long-term rally?

Weekly chart

A bounce from 96.10 and weekly SMA 200 happened in the previous week. This week, U.S dollar index launched upside and currently testing 96.70 resistance. Will the index continue higher and move toward 97.50 resistance again? Traders will observe the index reaction near 96.70 to decide whether the bullish pressure will continue or not.

Daily chart

U.S dollar index seems moving inside a bearish channel where it bounces from the bottom of channel and 96.10 recently. The bounce resulted in a close above daily SMA 200 which suggest the bearish trend will pause for now. If the index could surpass its bearish channel and close above it then we will see further upside in the U.S dollar index.

Trade plan (For U.S dollar pair)

At the current time, the index gives us a mixed impression where on the long-term the index still needs to cancel its bearish outlook by moving above May high. On the lower time-frame, the weekly chart is the most bullish out of three, but without a close above 96.70 then the pair is in danger of bearish reversal.

The weak dollar is what President Trump love and The Fed started sounded dovish which mean U.S dollar index might favor bearish scenario.