The U.S. Dollar Index (DXY) has been weak since late September. Prices are retesting their January and February lows with the risk that prices break still lower. Let's check.
In this daily bar chart of the DXY, below, I can see that prices moved below the 50-day moving average line in November and the slope of the 50-day moving average line turned negative. The DXY moved below its 200-day moving average line in early December. Rally attempts in the dollar have failed short of the under of the 200-day line in early January and early March. Now prices are retesting the 102 area and the lows of January and early February. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of the DXY, below, I see a bearish setup. Prices are pointed downward and the recent candles have been red (bearish) with no lower shadows telling me that currency traders have yet to reject the lows. The MACD oscillator is bearish and the slope of the 40-week moving average line has turned down.
In this daily Point and Figure chart of the DXY, below, I can see a potential downside price target in the 88 area.
Bottom line strategy: Weakness in the U.S. Dollar is probably a wind at the back of the precious metals. I look for this wind to continue.
