DXY closes above its opening price after recovering from early selling pressure
Dollar Index (DXY) Technical Analysis Report for Oct 09, 2019 | by Techniquant Editorial Team
DXY finished Wednesday at 98.815 edging lower $0.010 (-0.01%). Trading up to $0.185 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DXY as at Oct 09, 2019):
Wednesday's trading range has been $0.270 (0.27%), that's far below the last trading month's daily average range of $0.487. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DXY. Prices continued to consolidate within a tight trading range between 98.300 and 98.955 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Hanging Man showed up on August 27th, DXY actually gained 0.22% on the following trading day.
Prices are trading close to the key technical resistance level at 98.905 (R1). After having been unable to move lower than 98.540 in the previous session, the contract found buyers again around the same price level today at 98.595.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 98.955 where further buy stops could get activated. Trading close to 2017's high at 99.565 we might see further upside momentum if potential buy stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Spinning Top" stand out. Its common bullish interpretation has been confirmed for Dollar Index. Out of 214 times, DXY closed higher 51.40% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 51.87% with an average market move of 0.10%.