As of writing, the dollar index (DXY) hit 105.17, losing 0.65% from its local and 14-week high of 105.87 reached last Wednesday.
However, the roller coaster ride is not over yet: today, market participants are waiting for the release of the monthly report of the U.S. Department of Labor with data for February (at 13:30 GMT). If the expected strong data is confirmed or turns out to be better than forecast, it will become a new bullish driver for the U.S. dollar.
In this case, the breakdown of the upper limit of the range (between 105.87 and 104.05 on the attached DXY chart) will be a signal to resume long positions on the dollar and its index. Growth targets are local resistance levels 106.00, 107.00, 107.80, 108.00, 109.00, 110.00, 111.00, 112.00, 113.00, 114.00, 115.00.
Alternatively, after the breakdown of the 104.18 support level (200 EMA on the 4-hour chart), the price is likely to move towards the key support levels 100.20 (144 EMA on the weekly chart), 99.00 (200 EMA on the weekly chart).
The very first signal for the implementation of this scenario may be a breakdown of the short-term support level 104.94 (200 EMA on the 1-hour chart) with intermediate targets at support levels 104.70 (200 EMA on the daily chart), 104.30 (50 EMA on the daily chart).
Support levels: 105.00, 104.94, 104.70, 104.30, 104.18, 104.00, 103.00, 102.00, 101.00, 100.20, 99.00
Resistance levels: 105.87, 106.00, 107.00, 107.80, 108.00, 109.00, 110.00, 111.00, 112.00, 113.00, 114.00, 115.00
Trading scenarios
Dollar Index CFD #USDX: Sell Stop 104.90. Stop Loss 105.40. Take-Profit 104.70, 104.30, 104.18, 104.00, 103.00, 102.00, 101.00, 100.20, 99.00
Buy Stop 105.40. Stop-Loss 104.90. Take-Profit 105.87, 106.00, 107.00, 107.80, 108.00, 109.00, 110.00, 111.00, 112.00, 113.00, 114.00, 115.00
