Dollar Weakens as ECB Hike and US CPI Take Focus
The US Dollar Index (DXY) has weakened in recent hours, respecting a descending trendline as it drops below both moving averages. According to the 1-hour chart on Tradingview, the DXY currently stands at 98.73. Despite the downtrend, traders are approaching a range where a trading reaction is probable.
Looking ahead, a break of the first support level at 98.71 will expose 98.57 and then 98.42 further down. Conversely, if price action breaks resistance at 98.90, it will become more important to watch the levels at 99.05 and especially 99.20.
The Relative Strength Index (RSI) is in a weak range, confirming that price action is likely to stay in the bearish range. As long as the 98.71 level holds, a break of 98.90-99.05 will warrant a closing price above 99.20. Without this, we are likely to see price action trade in a range around the support of 98.71.