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09.01.202315:10 Forex Analysis & Reviews: Dollar Index Technical Analysis and Trading Tips for January 9, 2023

Exchange Rates 09.01.2023 analysis

While the U.S. continues to show mixed macro data, and market participants expect a further slowdown in the Fed's monetary policy tightening, the dollar remains under pressure, trading in the medium-term bear market zone, below the key resistance levels 104.30 (50 EMA on the weekly chart), 105.40 (200 EMA on the daily chart).

Many economists are already predicting that the Fed will cut the size of the rate hike again in early 2023, moving towards 0.25% hikes over the next couple of months. And this is a harbinger of a deeper drop in DXY.

Exchange Rates 09.01.2023 analysis

Over the past five incomplete trading weeks, DXY (CFD #USDX in the MT4 trading terminal) has come close to the support level of 103.40 four times.

For its final breakthrough and further decline, the DXY needs additional drivers. The publication of the latest inflation data in the U.S. on Thursday will be such a driver, if they again point to a slowdown in inflation.

Exchange Rates 09.01.2023 analysis

In case the 103.40 support level is broken, the targets will be the key support levels 100.00, 98.55 (200 EMA on the weekly chart). The breakdown of the 93.00 support level (200 EMA on the monthly chart) will indicate the breaking of the global DXY bullish trend.

In the alternative scenario, the DXY will resume growth, returning to the bull market zone, above the 105.40 resistance level. The first signal of the implementation of this scenario will be a breakdown of the 104.30 resistance level.

The breakdown of the 106.35 resistance level (144 EMA on the daily chart) will confirm the scenario of the resumption of growth in DXY.

Support levels: 103.40, 103.00, 102.00, 101.00, 100.00, 98.55, 93.00

Resistance levels: 104.30, 105.00, 105.28, 105.40, 106.00, 106.35, 107.80, 109.25

Trading Tips

Dollar Index CFD #USDX: Sell Stop 103.30. Stop Loss 104.10. Take-Profit 103.00, 102.00, 101.00, 100.00, 98.55, 93.00

Buy Stop 104.10. Stop-Loss 103.30. Take-Profit 104.30, 105.00, 105.28, 105.40, 106.00, 106.35, 107.80, 109.25

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Jurij Tolin,
Analytical expert of InstaSpot
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