Daily Resistance at 104.15 Remains Key on Dollar Index

The US dollar, according to the US Dollar Index, ended another week in positive territory, just. From the weekly scale (check weekly chart), you’ll note that the Index wrapped up the week considerably off best levels and pencilled in what many candlestick enthusiasts will refer to as a Japanese shooting star candlestick (bearish signal formed after a meaningful up move).

104.15 Resistance Weakened; Confluence at Support

Offers have likely been cleared around resistance from 104.15 on the daily timeframe, following the break to highs of 104.60 in early February. Having seen a mild correction form thereafter, this opens the door to a potential retest of neighbouring support from 103.62, a level bolstered by the 200-day simple moving average (SMA) and channel support extended from the low of 100.62. As you can see, this area, coupled with an early uptrend brewing since bottoming in late December 2023, offers meaningful technical confluence for prospective dip buyers should the buck seek lower levels this week.

Alternative Scenario: Breakout Buying

Leaving the aforementioned support zone unchallenged this week is also a possible scenario to bear in mind, given the lack of selling at the tail end of last week. With that, should we see another close above current resistance, traders will likely drill down to the lower timeframes in search of fading any retest seen at the level to take aim at fresh year-to-date highs and daily resistance from 105.04.

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