The Dollar Index Remains Firm

2023年10月29日

The buck ended the week eking out a moderate gain (+0.40%), according to the US Dollar Index. You will note on the weekly scale (not shown below) that the chart has been rangebound since late September, creating what many technicians will recognise as a bullish flag pattern between 107.35 and 105.54. This is in harmony with the monthly timeframe’s structure and trend. Technical structure, as you can see, exhibits scope to approach as far north as resistance from 109.33, with the trend higher since 2008 that’s currently aided by the Relative Strength Index (RSI) rebounding from just north of its 50.00 centreline (positive momentum). Consequently, although upside momentum has slowed in October (take note of the current monthly candle on track to end in the shape of an indecision candle), USD bulls could remain in the driving seat into the year-end.

Meanwhile, on the daily timeframe, the technical situation shows support remains at 105.76 in a market trending northbound since pencilling in a bottom at 99.59 in July. Thursday’s ‘shooting star’ failed to deliver much in selling, informing traders that the unit is still well bid at current prices and could target resistance at 107.61. You may acknowledge that the previous 105.76 rebound was also aided by the RSI rebounding from the 50.00 centreline and remains in positive territory until touching gloves with overbought terrain.

So, all in all, while things have been quiet for the buck recently, the technical pendulum continues to swing in favour of buyers towards at least resistance on the daily timeframe at 107.61.