When to Sell USD: The Guide for USD Trading

Highlights: The Dollar Index rallied in early October to 107.36 before turning lower, and aside from a brief pop higher in early November, the US Dollar has fallen back to lows last seen in late August. On the daily chart, the DXY is currently trading at 103.75, which is sandwiched between two Fibonacci levels – […]

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Editor Posted on 24 November 2023

Highlights:

If the US Dollar continues to rally, this is likely to be short lived.
Since the beginning of November, the DXY chart has been dominated by lower highs.

The Dollar Index rallied in early October to 107.36 before turning lower, and aside from a brief pop higher in early November, the US Dollar has fallen back to lows last seen in late August.

On the daily chart, the DXY is currently trading at 103.75, which is sandwiched between two Fibonacci levels – the 50% retracement at 103.41 and the 38.2% retracement at 104.34. The 200-day simple moving average currently provides support at 103.50. If the DXY can break above 104.34, and perhaps even test previous horizontal resistance at 104.66, then this could provide an area to scale into a short position. A break of support could eventually see the DXY retest the 102.49 level (61.8% Fibonacci retracement). As before, it is difficult to sell into rallies, so a stop loss should be placed at 105.00.