US Dollar Technical Analysis: Range May Break Downward

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Talking Points:

• 
  US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
  


• 
  Support: 11489, 11434, 11346
  


• 
  Resistance:11577, 11648, 11719
  

The Dow Jones FXCM US Dollar Index has flat-lined after hitting a five-year high, with negative RSI divergence warning a downturn may be ahead. Near-term resistance is at 11577, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 11648. Alternatively, a turn below the 11489-522 area marked by the December 8 top and the 23.6% Fib clears the way for a test of the 14.6% expansion at 11434.

We remain broadly bullish on the US Dollar against its leading counterparts in line with ourlong-term fundamental outlook. As such, we remain long via theMirror Trader US Dollar currency basket.

Daily Chart – Created Using FXCM Marketscope

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

US Dollar Technical Analysis: Range May Break Downward