Dollar Index (DXY) Technical Outlook July 1 2020

Posted on Jul 4, 2020

Tomorrow we will have one of the most important fundamental days of this month from the dollar side. Non Farm Payroll (US Job) data will be released at 1:30 PM London time. Traders are expecting positive job data as businesses are opening more and more after the lockdown. Positive job data is positive for the dollar in a normal situation. Mixed data could bring volatility from both sides for the market.

The dollar is having the exact opposite movement of the stock indices so the stock market could be a major mover for the dollar as it showed today. In the Daily chart it seems bearish but in the Weekly chart DXY is still having a bullish bias. In the intraday chart like H4 DXY is still outside of the descending channel and it has a possibility of touching the inside red trend line. It’s also at 61.8% fibbo of the present swing. It's difficult to predict which direction DXY is going to go from here. We have to prepare for a move in either direction.

We will be neutral with the dollar as fundamental data can’t be predicted. An H4 closure below the red trend line could push the dollar down to the 96.43 zone and another H4 closure below 96.43 would push the dollar to the 95.90 zone. You can’t trade by relying on a running candle. Bullish bias resistance is at the 98.30 zone. We will also be covering the news event. A note on data and market expectations will be provided in the Forex chat.