• US Dollar Index Maintains Annual Opening Range Through Q3 – Pending Breakout
• DXY tests confluence of critical resistance in open July
• Constructive above 90.82 – breach / fence above 93 required to validate

DXY Weekly Price Table

At the start of the second quarter, our DXY outlook concluded, “Summary: Look for upper exhaustion early in the quarter to give way to a larger pullback. We got it! The index opened the second quarter on a reversal candle with a one-way road taking the dollar back to February lows before rebounding. The immediate focus as we approach the opening of the third quarter is this recent advance in resistance to the downtrend from confluence to 92.28 / 46- a region defined by the 75% parallel (blue), the 2018 annual opening, and the 23.6% Fibonacci retracement of the 2020 decline.

In search of a possible inflection outside this zone

An upward breach above exposes the annual high week close to 93.01– look for a reaction there IF hit with a break / close above necessary to keep the long bias viable towards the close of the low week of 2016 to 93.88 and the 38.2% retracement / low from March to 94.47 / 65. Initial support is based on the 61.8% retracement of the annual range / 2017 low to 80.82-91.01 supported by the annual open at 89.93 – ultimately a break / close below would be required to mark the resumption of the wider downtrend towards the 2018 lowest week close / 2018 low. 2021 to 89.07 / 20. Conclusion: withdrawals should be limited to 90.82 IF the price rises with a breach above the 93-the handle needed to suggest that a larger low is in place for the greenback.

Written by Michael Boutros, technical strategist