DXY breaks below Friday's low
Dollar Index (DXY) Technical Analysis Report for Dec 02, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DXY finished Monday at 97.790 tanking $0.415 (-0.42%) on high volume. This is the biggest single-day loss in over two months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 98.155, the market confirmed its breakout through the prior session low after trading up to $0.405 below it intraday.
Daily Candlestick Chart (DXY as at Dec 02, 2019):
Monday's trading range has been $0.570 (0.58%), that's far above the last trading month's daily average range of $0.283. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DXY.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 97.620 (S1). The contract closed back below the 50-day moving average at 97.998 for the first time since November 21st. When this moving average was crossed below the last time on November 15th, DXY lost -0.16% on the following trading day.
DXY shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling could speed up should prices move below the close-by swing low at 97.620 where further sell stops might get activated.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R2" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Dollar Index. Out of 17 times, DXY closed higher 76.47% 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 58.82% with an average market move of 0.31%.