DXY Remains Choppy As US Election Results Remain Too Close to Call
US election results in the United States remain too close to call price action on the dollar index continues to remain choppy as has been the case with most other USB linked assets. In a trading data has seen some extreme beef sauce, the US dollar index is starting to see some upside momentum. However, this momentum remains weak around the 93.42 region as the bulls seek for a chance to exert follow-through action.
The ongoing volatility and uncertainty surrounding the US elections should leave the very near-term outlook on the dollar unclear. That said, while the 94.30 area emerges as quite a decent up barrier, the 6-month (now support) line in the 93.00 neighbourhood is expected to hold an occasional downside test.
The ADP Non-Farm Employment Change came in today at 365K, versus a consensus of 650K and the previous number of 753K. However, private-sector employment data bears virtually no importance on a day when US election results are being tallied.
The DXY is presently up by 0.16% on the day and now trades at 93.477.
Technical Outlook for DXY
The USD Index is on the verge of forming another rounding bottom pattern on the daily chart. Today’s price candle has found support at the pattern’s border, right on the 93.173 support.
A breakdown of this support level invalidates the pattern and sends the USD Index towards the downside targets at the 92.50 and possibly the 91.906 support levels.
On the other hand, a firm bounce off the 93.173 support level allows the USD Index to target the 93.805 resistance. A break of the rounding bottom’s lid at 94.00 allows the 94.620 resistance to come into focus, with the 95.191 and 95.717 potential resistance targets up ahead.
Continued uncertainty as to the outcome of the US Elections could promote safe-haven demand for the US Dollar, which could allow the DXY bulls to push prices higher. However, the 200-day moving average forms a dynamic resistance around the 96.457 resistance. As long as price trades lower than this level, the sentiment on the index in the medium-term remains negative.