March U.S. dollar index futures on the New York Board of Trade on Tuesday slumped to a fresh two-week low of 84.28. Tuesday’s price action did produce a bearish downside “breakout” from a two-week-old sideways trading range on the daily bar chart, and the dollar index bears have gained some fresh near-term downside technical momentum. Bears also point to the Moving Average Convergence Divergence (MACD) indicator overlaid on the daily bar chart for the March U.S. dollar index.
The indicator is poised to very soon produce a bearish line crossover signal, whereby the MACD line crosses below the “trigger” line of the indicator. The past few months have seen the MACD line crossover signals on the daily chart work very well at producing buy and sell signals. Dollar index bulls can still correctly argue that prices remain in an uptrend from the December contract low of 81.90. However, for the bulls to regain some fresh upside near-term technical momentum, they would have to push March futures prices above strong chart resistance at this month’s high of 85.17.
The U.S. dollar index bears would gain stronger downside technical momentum by pushing March futures below strong trend-line and flat-line support at the 84.00 area.
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