Forex Analysis & Reviews: 07.03.2024 - US Dollar Index: trading...

07.03.2024 03:08 PM

US Dollar Index: trading scenarios on March 7, 2024

The dollar plummeted on Wednesday, with its DXY index dropping by about 50 pips. It extended losses in early trade today, accompanied by a decline in US Treasury yields.

Markets are anticipating a rate cut from the Fed, despite Jerome Powell's virtually neutral rhetoric and warnings from other Fed officials about excessive expectations regarding monetary policy easing by the US central bank.

From a technical point of view, the US dollar index (CFD #USDX on the MT4 platform) is deepening within a downward channel on the weekly chart, heading towards the key support level of 100.75 (200-period moving average on the weekly chart), which separates the long-term bull market from the bear one.

In the medium term, with the breach of the key support level of 103.75 (EMA200 on the daily chart), and in the short term, the US dollar index has already moved into the bear market zone. If the price breaks through the 103.00 mark, the index could decline to the support levels of 101.90, 100.75, and 100.00. Further developments will depend on the situation. In the meantime, the best way to make a profit is to open short positions.

In an alternative scenario, a decline to the 103.00 mark will bring dollar buyers back into the market. In case of a breakout of the resistance levels of 103.75 (EMA200 on 1-hour, 4-hour, daily charts) and 103.88, a buy signal will be generated. A breakout of the local resistance levels at 104.90 and 105.00 could revive the dollar's long-term bullish trend. In this case, the index is expected to head towards the October highs and the marks of 106.50, 106.80, 107.00, and 107.30.

This scenario will be relevant if tomorrow's US Department of Labor report turns out stronger than expected, and fresh data to be released on Tuesday indicate rising inflation.

The further dynamics of the dollar and its DXY index will largely depend on fundamental factors and the Fed's policy steps.

*) see InstaForex trading indicators for USDX

Support levels: 103.00, 102.00, 101.90, 101.00, 100.75, 100.00

Resistance levels: 103.75, 103.88, 104.00, 104.25, 104.59, 104.90, 105.00, 106.00, 106.80, 107.00, 107.30

Trading scenarios

Alternative scenario: Buy Stop 103.40. Stop-Loss 103.00. Targets 103.75, 103.88, 104.00, 104.25, 104.59, 104.90, 105.00, 106.00, 106.80, 107.00, 107.30

Main scenario: Sell Stop 103.10. Stop-Loss 103.40. Targets 103.00, 102.00, 101.90, 101.00, 100.75, 100.00

*) "Targets" correspond to support/resistance levels. This does not necessarily mean they will be reached, but they can serve as a guide in planning and placing your trading positions.

open a trading account
become a signal provider or an investment portfolio manager

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

If you have any content questions, please contact editorial-board@instaforex.com

# USD # American markets #USDX Trading plan

Recommended Stories

How to Trade the GBP/USD Pair on April 4? Simple Tips and Trade Analysis for Beginners

How to Trade the EUR/USD Pair on April 4? Simple Tips and Trade Analysis for Beginners

Trading Recommendations and Analysis for GBP/USD on 4: Can Powell Fix the Situation?

Trading Recommendations and Analysis for EUR/USD on April 4: New Panic in the Market

GBP/USD: Trading Plan for the U.S. Session on April 3rd (Review of Morning Trades)

EUR/USD: Trading Plan for the U.S. Session on April 3rd (Review of Morning Trades)

How to Trade the GBP/USD Pair on April 3? Simple Tips and Trade Analysis for Beginners

How to Trade the EUR/USD Pair on April 3? Simple Tips and Trade Analysis for Beginners

Trading Recommendations and Analysis for GBP/USD on April 3: The British Pound Remains in a Flat Range

Trading Recommendations and Analysis for EUR/USD on April 3: No Tariffs, No Movement

Top analytics