Near term, expect dollar index to retest 97.22 resistance area

THE dollar index (DXY) is an index of the United States dollar relative to a basket of foreign currencies, mainly against the euro, Japanese yen, pound sterling and Canadian dollar. A rising DXY means the US dollar is appreciating against this basket of currencies.

Since hitting a high of 103.82 in January 2017, the DXY has been trending lower sharply. The descending price action lasted for nine months before a near-term bottom emerged in September.

Even though there was a marginal break below the crucial 91.92 support area in September (shown by the highlighted box), buyers hurried back and kept the 91.92 support area valid. The 91.92 support area will be the major pivotal point moving forward as the next wave of selling will only begin after sellers break below it.