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  • The Dollar Index drops ahead of the US economic data, the figures could be decisive.
  • It’s in a neutral zone, but I really hope that the US data will bring us a clear direction.
  • A potential growth towards the second warning line (wl2) signals that the USD may rise versus the other currencies.

The DXY Dollar Index price is trading in the red at 92.41 level below 92.47 static support. Stabilizing below this level and under dynamic support may signal further drop. The pressure is high at the moment of writing.

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That’s why we have to wait for the United States data to bring us a clear direction. Fundamentally speaking, the economic data could be crucial and decisive for the DXY price.

The US PPI is expected to increase by 0.6% in August versus 1.0% growth registered in July, while the Core PPI may increase by 0.5% versus 1.0% in the last reporting period. Also, the Canadian Employment Change, Unemployment Rate, and the Capacity Utilization Rate could impact the DXY.

Surprisingly or not, the index dropped as much as 92.33 levels today, even if the United States data has come in better than expected in the last two days. The Unemployment Claims dropped to 310K in the last week versus 343K expected, but it has failed to boost the DXY Dollar Index.

DXY Dollar Index price technical analysis: Key dynamic support to hold

DXY Dollar Index 4-hour price chart
DXY Dollar Index 4-hour price chart

The DXY is fighting hard to stay above the 92.47 level and above the descending pitchfork’s first warning line (wl1). However, it has found resistance at the 92.80 level, so a temporary decline was somehow expected.

Technically, the index has signaled that the downside is limited and that the price could come back higher. A temporary retreat is natural after its amazing rally. False breakdowns below the immediate support levels followed by stabilization above 92.47 could signal a potential towards the second warning line (wl2) of the descending pitchfork. Better than expected, US data could lift the DXY. This scenario may signal that the USD could appreciate. On the other hand, poor US figures could demolish the index and force the greenback to depreciate versus its rivals.

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We are in a neutral zone, but I hope that the US data will bring us a clear direction. The weekly pivot point (92.28) stands as critical support, as a downside obstacle.

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