Technical Technical Technical

Technical Update - Dollar Index: 2022 has been the year of the Dollar. Will it continue?

Forex 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

The Dollar Index has reached 1.382 projection of the latest correction at around 109.61 and the 0.764 retracement of the 2001-2008 bear move.
There is no divergence on RSI indication the Dollar Index could move higher in coming months. A move to the 1.618 projection at 113.10 is in the cards but the uptrend could extend to 115-120.

Source: Saxo Group

However, on the short- to medium term the Dollar Index is showing RSI divergence which indicates a correction is in the cards, but if RSI breaks above its upper falling trend line on the weekly chart the uptrend could extend further as describe above.
A correction is likely to be minor and if the Dollar Index doesn’t close below support at around 104.52 the uptrend is intact.

Source: Saxo Group

Also, on the daily chart there is RSI divergence indicating a looming correction possibly down to t4est the lower rising trendline.
However, if RSI breaks above its rising trendline the divergence can be cancelled and the uptrend will continue. A break below 107.65 could be the tricker for a correction.

Source: Saxo Group
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