DXY likely to revisit 94.21 and 95.14 in coming weeks - Rabobank

From a technical perspective, analysts at Rabobank, see evidence that the US Dollar Index (DXY) could move higher over the next week.

Key Quotes:

“The DXY Index fell sharply from 103.82 at the beginning of 2017 to 88.253 in February 2018 before stabilising just above the long-term trendline support from the 2011 low. This multi-year upside trendline coincided with the 61.8% Fibonacci retracement of the move higher from the 2014 low to the 2017 high and the 50% retracement of the 2011-2017 rally (50% is not a Fibonacci ratio, but it tends to provide important support). Essentially, all these levels formed a strong support area that prevented further fall in the DXY Index.”

“The Dollar Index gained sufficient momentum and broke higher above the downside trendline from the January 2017 high marking a shift in the bias to the upside. The December 2017 top at 94.219 is the next potential target followed the November high at 95.149.”

“Given that the DXY Index rallied well above the upper trendline, it would be difficult to dismiss the notion that we have witnessed a valid bullish breakout. Based on this evidence it is reasonable to assume that the US Dollar Index is likely to revisit next important tops at 94.219 and 95.149 in the coming weeks. A close above these levels would strengthen the upside bias.”

“While first important support comes at around 92.35, it would require a much sharper correction well below the 91~ pivot to annul the constructive short-term outlook for the DXY Index.”