US Dollar 5-day Winning Streak at Risk, Will Prices Hold at February Lows?

US Dollar, DXY, Moving Averages, False Breakout – Technical Update:

• US Dollar 5-day winning streak at risk after Tuesday Asia trade
• Still, the currency has avoided a deeper bearish trajectory of late
• Key resistance is the 20-day MA, support at 100.82 – 101.02

The US Dollar completed its fifth consecutive daily winning streak at the end of Monday. That marked the best winning period for the currency since late May. If the DXY Dollar Index can sustain a sixth push higher, that would mean the longest winning streak since May 2022. But, as Tuesday’s Asia-Pacific trading session concludes, the currency is off to a rough start.

That said, things are looking a little bit rosy for the US Dollar. As I mentioned last week, the currency’s bearish breakout was losing steam. As expected, prices followed through higher. After a seemingly false breakout, the DXY is back above the former 100.82 – 101.02 support zone. That is bringing the focus to a more neutral setting after a string of losses since March.

Immediate resistance appears to be the 20-day Moving Average (MA) above. Just beyond this is 101.92, where support was found in mid-June. This price could hold as new resistance. Above that is the 50-day MA. Keep in mind that a bearish Death Cross between these two lines remains in play, offering a near-term bearish bias.

In the event of sustained losses downward, the currency will find itself facing the 100.82 – 101.02 support zone once more. That said, and as we have seen last week, a bearish breakout may not necessarily spell trouble for the currency. New support was established at 99.57. A deeper and stronger pullback that extends losses from last year would place the focus on the March 31st, 2022 low at 97.68.

Chart Created in TradingView

— Written by Daniel Dubrovsky, Strategist for DailyFX.com