DXY, GBP/USD, OIL and USD/NOK Forecast – US Dollar and Oil in Focus

US Dollar Index Technical Analysis

The first chart in front of you is the US Dollar Index. This is a chart, quite frankly, I could probably show every day. I always watch this chart. What I am looking for this specific day is whether or not we continue to drop towards 96 or if we bounce towards 98.

If we were to break above 98, that would be a definite shift in the behavior of the US dollar. If we fall towards 96, I will wait to see if we break down because if we do, then it will have a major influence on what we see elsewhere. Notice the somewhat stagnant candle early during the day.

GBP/USD Technical Analysis

You can see what you have here in the British pound, which I am watching as well. The 1.3750 level is a major resistance barrier. If we cannot break above there, I would be very interested in shorting on signs of exhaustion, especially if the US Dollar Index continues to climb because that means we have dollar strength around the world.

If it falls and starts running towards the 96 level over in the US Dollar Index, then I think we revisit the 1.39 level here in the British pound. Interesting action here; we continue to see a lot of noise right around 1.37 to roughly 1.3750 yet again. That has been the case here for some time, so I am waiting to see if we roll over or do, we will finally blast through it.

Crude Oil Technical Analysis

The next chart is the light sweet crude oil market. This is the CL futures contract, and I am watching this mainly because it does look like it is coiling at the moment. Volume has picked up on this latest up move and the 66 level I think is worth paying close attention to.

If we can break above there, that would be a good sign that we are going to the 70 level. If we pull back, we have the 200-day EMA sitting right around the 62.60 level and then the 62-level underneath offering support. However, the trade may not be here in crude oil, at least not right away.

USD/NOK Technical Analysis

This chart is the US dollar against the Norwegian krone, and you can see that we are sitting just above the 9.5 level. The Norwegian krone is highly influenced by the oil market, so if oil starts to move to the upside, we could get a significant breakdown here, perhaps down to the 9-krone level.

That is a fairly sizable move in this pair. If oil cannot take off, then we may revisit the 9.75 level, where we would have to see if there is resistance. This is definitely a bearish setup for the US dollar. The question is, will oil give us the reason for this market to truly break down? This is one I am watching very closely and one, unfortunately, a lot of retail traders tend to ignore.