DXY: technical analysis and trading recommendations_06/27/2022


As we noted in our today's review "DXY: in the middle of the range between 105.50 and 101.30", DXY futures are falling again today. At the time of publication of this article, they are traded near 103.62, 195 points below the local multi-year high of 105.57 reached in the middle of this month.

DXY W Chart

If the downward correction of DXY continues, the price will move towards the local support level 101.30, the breakdown of which may increase the risks of breaking through the psychologically significant support level 100.00, which, in turn, may break the bullish DXY trend.

DXY D Chart

In general, the positive dynamics of DXY still remains. Successive breakdown of the local resistance levels 104.00, 105.00, 105.57 will create the prerequisites for growth towards multi-year record highs 121.29 and 129.05, reached, respectively, in June 2001 and November 1985.

DXY H4 Chart

This is the most likely scenario. Speaking before the House Financial Services Committee on Thursday, Fed Chairman Powell reaffirmed that "an unreserved commitment" to fighting inflation and trying to "moderate demand so inflation can come down" remains a top priority for US central bank officials. "The Fed could continue aggressive tightening even if economic activity slows down sharply," Powell also said. The prospect of further tightening of the Fed's monetary policy creates prerequisites for further strengthening of the dollar. Strategic investors who prefer long-term guaranteed profits choose the rising dollar as the subject of their investments.

Concerns about the risks of a recession in the global economy, in turn, also lead to increased demand for a safe dollar.

Support levels: 103.24, 101.30, 100.00, 99.79, 98.67

Resistance levels: 104.00, 105.00, 105.57, 106.00

Trading Recommendations

Sell ​​Stop 103.10. Stop Loss 104.40. Take-Profit 102.00, 101.30, 100.00, 99.79, 98.67

Buy Stop 104.40. Stop Loss 103.10. Take-Profit 105.00, 105.57, 105.76, 106.00