DXY multi time-frame analysis
In this article, we will take a look at the DXY from higher time frames to actionable lower time frames
On the monthly chart, we can see that the instrument is testing the strong 96 support of the long-term uptrend channel connecting 2011 low and 2017 high. This Year’s low was at 94.66. The instrument needs to hold this support for the upside continuation. A breakout below 94.60 would mean a possible downside reversal and a deeper pullback to 93.30.
The weekly chart is indicating the failure to break below 96 for 4 weeks but also the inability to break above the resistance 98. Bounce off this level is expected, but only a break above 98 will give us high probability long trade entries.
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On a daily chart, we can see that the instrument is testing for the second time 96 level and could be forming a temporary double bottom as some divergence is visible by looking at Stochastic oscillator. A daily confirmed break below the falling trendline resistance 96.70 would be enough for an extension higher and a high probability long trade entry. You can go long on a break above 96.70 with the stop loss below with 97.70 target and beyond in the medium-term.
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
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