The Dollar Index appears to be in the process of breaking down, at least for the coming week, with the head/shoulder neckline now negated and the momentum indicators hinting at lower levels ahead. Currently at 93.65, we are sitting right on the 200 DMA and this may act as near term support above Friday’s low of 93.51. Below this, strong support should then be seen at the 100 WMA @ 93.28, below which could then see a run towards the 13 October low of 92.75 and even to the 8 Sept low of 91.01. Although this remains some way off, the daily indicators are looking heavy and the downside seems the direction to focus on.
The weekly indicators still point higher though, so buying into near term weakness may be the medium term plan. On the topside, resistance will be seen at 94.00 (minor) and at 94.30 (previous neckline), ahead of 95.00 and the minor double top at 95.15 (27 Oct/7 Nov highs). I doubt that we see it up here this week, but if wrong, look for a run towards Fibo resistance at 95.89 ((38.2% of 103.82/91.01).
For the time being, selling towards the former support- turned- resistance at 94.30, with a SL above 94.70 seems to be a plan.
DXY – Weekly