US Dollar Technical Analysis: Breakout Looms As DXY Has Bullish Momentum

US Dollar Index (DXY) Key Points:

  • The ONE Thing: The positive technical picture for the US Dollar Index is now aligned with the positive fundamental and sentiment backdrop. The Fed is looking to hike further saying they see themselves still away from the neutral rate while dissipating risk appetite is making higher yielding US Treasuries likely an attractive place for global capital flows that could keep USD bid.
  • Technical studies of the US Dollar crosses show EUR/USD moving toward a key summer pivot at $1.1430 and GBP/USD at $1.300
  • Global yield curve spreads continue to favor capital flows shifting to the US Treasury markets as US-China 10yr yield curve spread now at 7-year lows.
  • Technical Outlook on the US Dollar: The US Dollar has bullish momentum per the Ichimoku Cloud indicator, which could precede a move to the August high of 96.60/98 or higher with support in focus at 94.30.

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