DXY Dollar Index Price Vulnerable To Test 93, Dismal PMIs Fuel Bears

The DXY Dollar Index price drops like a rock at writing and almost hits the 93.00 psychological level. So technically, the DXY has found strong resistance, and it was somehow expected to fall in the short term.

The US dollar depreciates versus its rivals as long as the index extends its sell-off. Unfortunately, the Dollar Index has taken a hit from the United States economic data. The Flash Services PMI registered an amazing drop from 59.0 to 55.2 points, even if the specialists expected to see a drop only to 59.1 points. Also, the Flash Manufacturing PMI was reported at 61.2 points below 62.4 expected compared to 63.4 in the previous reporting period. Finally, the Existing Home Sales indicator was reported better than expected, but it has failed to save the Dollar from a deeper drop.

Tomorrow, the US New Home Sales and the Richmond Index will be released, but I don’t think that will significantly impact the DXY. In the short term, the index was into a corrective phase after the last upwards movement.

DXY Dollar Index price technical analysis:

(Click on image to enlarge)

DXY Dollar Index 4-hour price chart

DXY Dollar Index 4-hour price chart

The DXY price plunged after failing to stay above the former uptrend line. It has ignored the 93.19 static support (resistance has turned into support) and the 93.22 weekly pivot point. The near-term support is seen at the descending pitchfork’s warning line (wl1). Still, the current decline could be only a temporary one.

From a technical point of view, the outlook is bullish after breaking above the 93.19 level. Now it has dropped a little to test and retest the immediate downside obstacles before jumping higher. We’ll have to wait for a temporary range, consolidation, or a strong bullish pattern here before looking for fresh, long opportunities on USD.

Personally, I believe that only a new lower low, a potential drop below 92.47 level, could invalidate an upside continuation.

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