US Dollar Index Technical Analysis: If and only if

The US Dollar Index (DXY) has snapped some crucial technical levels in its run higher over the past two days. Trading even above the 55-day Simple Moving Average (SMA) at 105.04 on Monday, it will be key to see if this level can hold as support by Wednesday when a rather hawkish Fed might lay out the plan for the DXY to jump back to 106.00. That would mean even a possibility for a fresh 2024 high, depending on the message US Fed Chairman Jerome Powell delivers to markets. 

On the upside, there are some technical or pivotal levels to watch out for. The first is 105.52, a pivotal level that held support during most of April. Next comes at 105.88, which triggered a rejection at the start of May and will likely play its role as resistance again. The biggest challenge remains at 105.51, the year-to-date high marked on April 16. 

On the downside, a trifecta of SMA’s is now playing as support. First, and very close, is the 55-day SMA at 105.04. A touch lower, near 104.45, both the 100-day and the 200-day SMA are forming a double layer of protection to support any declines in the US Dollar Index. Should this area be broken down, look for 104.00 to salvage the situation