By Tomasz Wisniewski, Alpari
Last week was definitely an eventful one for DXY, which came as no surprise considering the full calendar we had. We’d have been surprised if nothing had happened, and traders took those fundamental events from last week very well!
DXY is climbing higher and it looks like the bad times are past us, as we prepare for a new upswing. First, DXY broke the mid-term downwards trend line (green), which had been connecting the lower highs since mid-August. That was the first sign of a spring here. Then DXY broke the 23.6% Fibonacci, and finally the 38.2% Fibo, which in the same time was a crucial S/R level in the past few weeks (since the 22nd of August, when it was first used as a support). The breakout of that line is currently the most important achievement for buyers.
The buy signal is on and will be here as long as the price stays above 23.6% Fibonacci. The crucial resistance and the current target is at 61.8% Fibonacci. A small bearish correction may be triggered if we make it there, but the overall trend should remain intact, so buy.
Source: Dollar index: The awakening