The US Dollar Index advances for two days

After falling to a 7-week low of 101.91, the US Dollar Index (DXY) rises 1.58%. The DXY hit a daily low of 102.50 before trading as of this writing at 103.094.

The DXY is neutrally biassed on the daily chart because it is still above the 100.85 2023 low. The US Dollar Index also broke over its previous higher high (HH) of 105.63 and set a YTD high of 105.88. Also, the “morning star” candlestick chart pattern is developing and may open the door for a challenge of the daily Exponential Moving Averages (EMAs), which are currently sitting at about 103.782.

The DXY needs to conclude each day above the high set on March 22 at 103.26 in order for the bullish trend to resume. Once completed, the DXY may challenge the 103.78 area at which the 20-day EMA and 2017 high coincide. If that significant resistance region is breached, the 50-day EMA at 103.97 and 104.00 are targets.

In the alternative, buying weakness can indicate that the current leg-up is really a correction of a persistent downturn. So, 103.00 would serve as the US Dollar Index’s initial support level. The YTD low at 100.85 and the swing low at 101.91 will both be exposed upon a breach of the latter.