US Dollar Index (DXY) Analysis:- US Dollar Index (DXY) Technical Analysis Today 25 Nov 2024
For traders analyzing the US Dollar Index (DXY) technical analysis today, the index is showing signs of short-term bearish pressure while maintaining a broader bullish outlook. Let’s break down the current technical landscape to identify potential opportunities.
1. Weekly Time Frame Analysis
On the weekly chart, the US Dollar Index (DXY) has been trading in a consolidation phase around the $107 price level since 2022. This level acts as a strong resistance zone, and the current weekly candle has also been rejected at $107, reinforcing this resistance.
There is an incomplete bearish harmonic pattern, with a target near $112. However, from the current $107 level, a downside correction is expected before the bullish trend resumes in the coming weeks. This correction aligns with signals observed in the US Dollar Index (DXY) technical analysis today.
2. Daily Time Frame Analysis
On the daily chart, the DXY shows signs of bullish divergence, which suggests that momentum is building. However, the price opened the week with a downward gap, signaling the strength of the $107 resistance level. This development supports the view of a short-term pullback to lower levels before any continuation of the bullish trend.
The $102 price level is identified as a potential good buying zone in the coming weeks, where the index is likely to find strong support.
Key Levels for Today
- Sell Entry Range: $106.50 – $107.50
- Stop Loss (SL): $108.30
- Target (TGT): $104
3. Why the DXY Shows Short-Term Bearish Potential
- Resistance at $107: The $107 price level has acted as a key resistance zone since 2022, and the current rejection confirms its strength.
- Gap Down Opening: The downward gap reinforces bearish sentiment at higher levels.
- Harmonic Pattern Setup: The incomplete bearish harmonic pattern targets $112, but the current rejection indicates a correction is likely before the pattern completes.
Strategy for US Dollar Index (DXY)
For traders focused on US Dollar Index (DXY) technical analysis today, the following strategy is recommended:
- Plan a short trade between $106.50 – $107.50.
- Set a stop loss at $108.30 to manage risk effectively.
- Target a downside move to $104, which aligns with the expected correction.
4. What Invalidates the Short Trade?
If the price breaks and closes above $108, the short trade setup will be invalid, and the DXY could target higher levels, such as $112, in line with the harmonic pattern.
Conclusion: Short-Term Correction in DXY Before Bullish Continuation
In the context of US Dollar Index (DXY) technical analysis today, the index is facing resistance at $107, suggesting a short-term pullback toward $104. Traders can take advantage of this move by planning short positions within the $106.50 – $107.50 range while using a stop loss at $108.30 to protect against an unexpected breakout.
As the price approaches the $102 support zone, the bullish trend is likely to resume, targeting $112 in the longer term.
FAQs
1. What is the current trend for the US Dollar Index (DXY)?
The DXY is currently in a consolidation phase, with short-term bearish pressure but a broader bullish outlook.
2. What is the key resistance level for the DXY?
The $107 price level is acting as a strong resistance zone.
3. Where is the strong support level for the DXY?
The $102 price level is emerging as a strong support zone for potential bullish continuation.
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Note: Always remember: risk no more than 1% per trade.” Keep trailing your stop loss to secure bigger profits.
Please note this is only an opinion and not financial advice.
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