FX.co ★ U.S. Dollar Index (USDX) in Forex Trading

USDX Daily Timeframe: Based on the USDX chart on the daily timeframe, price movements over the past few months have exhibited quite complex dynamics, with distribution phases, sharp declines, and gradual recoveries. After a moderate uptrend in the previous quarter and peaking around 100.30, the dollar index then experienced consistent selling pressure. The decline deepened in mid-January, marked by a long bearish candlestick that brought the price down to near 95.50. This level was a significant low point and an area of strong demand, triggering a buying reaction. Looking at the 100 Moving Average (blue line) and 200 Moving Average (red line) indicators, it can be seen that during the downtrend, the price moved below both moving averages, confirming the dominance of the medium-term bearish trend. The 100 Moving Average is below the 200 MA with a downward slope, reflecting substantial selling pressure during that period. However, recent developments indicate a change in momentum. The price has successfully broken through the 100 MA again and is now approaching the 200 MA, which is around 99.40–99.50. This is a crucial technical zone because the 200-day moving average (MA) on the daily timeframe often determines the direction of the medium- to long-term trend. The price structure following the low at 95.50 shows a fairly clear pattern of higher lows. After an initial rebound, the price made a limited correction but did not break through the previous low. This indicates that selling pressure is weakening and buyers are gradually building positions. The gains over the past few sessions have been impulsive, with relatively large bullish candles and strong closes indicating increased buying interest.

Currently, the 98.90–99.50 area represents crucial resistance. Besides coinciding with the 200-day moving average (MA), this zone is also a previous supply area that served as a breakdown point before a major decline occurred. If the price can break through and maintain above 99.50, with confirmation of a solid daily closing, the opportunity for continued gains towards 100.30 and even retesting the previous peak will increase. This breakout also has the potential to trigger a more significant change in trend structure, especially if the 100-day moving average (MA) begins to reverse upward and approaches the 200-day moving average (MA), a potential golden cross. However, the risk of rejection in the 200-day moving average (MA) area remains a concern. If the price fails to break through this resistance and forms a rejection pattern such as a long upper wick or bearish engulfing pattern, a technical correction towards the support area of 97.30 or even 96.50 is quite possible. The 97.30 area is important support because it previously served as minor resistance, having been breached during the last upward phase. Overall, the USDX is currently in a recovery phase on the daily timeframe after a strong bearish trend. Short-term momentum is bullish, but confirmation of a medium-term trend reversal still depends on the price's ability to break through and maintain its position above the 200-day moving average (MA). As long as the higher low structure remains intact and the price doesn't fall back below 97.30, the technical bias favors continued strengthening of the dollar index in the near term.