The dollar and its DXY index have been declining since the opening of today's trading day. As of writing, DXY futures (CFD #USDX in the MT4 trading terminal) were trading near 102.86, about 100 points below the local 6-week high of 103.85 reached last week.
The breakdown of today's local low at 102.88 may be a signal to resume short positions on DXY with targets at local support levels 101.50, 101.00.
In case of further decline, the targets will be the key support levels 100.00 (144 EMA on the weekly chart), 98.75 (200 EMA on the weekly chart). The breakdown of the long-term support level 93.30 (200 EMA on the monthly chart) will confirm the final return of the dollar and its DXY index to the global downward trend zone.
Alternatively, after the breakdown of the resistance levels 103.75 (50 EMA and the upper line of the downward channel on the daily chart), 104.00 (50 EMA on the weekly chart), DXY will start rising again, going towards the key resistance levels 104.70 (200 EMA on the daily chart), 105.20 (144 EMA on the daily chart). Their breakdown will confirm the scenario of resumption of the long-term bullish trend of DXY.
The first signal for the implementation of this scenario will be the breakdown of resistance levels 103.13 (200 EMA on the 4-hour chart), 103.27 (today's local high).
Today, market participants who follow the dollar will closely follow the release of the latest U.S. inflation data (13:30 GMT).
Support levels: 102.88, 102.00, 101.50, 101.00, 100.00, 98.75
Resistance levels: 103.13, 103.27, 103.75, 104.00, 104.70, 105.20, 107.80, 109.25
Trading scenarios
Dollar Index CFD #USDX: Sell Stop 102.60. Stop Loss 103.30. Take-Profit 102.00, 101.50, 101.00, 100.00, 98.75
Buy Stop 103.30. Stop-Loss 102.60. Take-Profit 103.75, 104.00, 104.70, 105.20, 107.80, 109.25