Dollar Index Retreats from Key November High
The Dollar Index (DXY) has slipped below its 5 November peak, where a false bullish breakout (marked by an arrow on the chart) occurred above the 1 August high — a development anticipated earlier in our post “The Dollar Index Near a Key High.”
At the begin of the week, sentiment in currency markets is being influenced by expectations of upcoming monetary policy guidance from officials at the European Central Bank and the US Federal Reserve, according to Trading Economics.
Notably, Reserve Bank of Australia Deputy Governor Andrew Hauser commented that domestic financial conditions are now close to a neutral interest rate, one that neither stimulates nor sluggishs the economy — a statement that lifted the Australian dollar.
Technical View on DXY
The ascending channel drawn in earlier analysis remains valid for the Dollar Index, with several key technical observations:
→ The channel median line has switched from acting as support to now functioning as resistance (highlighted by its change from blue to red).
→ The QL line, which divides the lower half of the channel into quarters, is providing support for the index.
→ The DXY has slipped below the psychological 100-point mark.
The 3.7% rise in the Dollar Index since mid-September appears to have attracted fresh tradeing interest, with some late purchaviewrs potentially caught in a bull trap near recent highs.
The next support level to watch is around 99.45, where a double-top pattern (A–B) previously formed. A decisive break below this area could open the way for a move towards the lower boundary of the red channel.
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