DXY breaks back above 20-day moving average
Dollar Index (DXY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DXY finished the week -0.57% lower at 99.805 after gaining $0.405 (0.41%) today. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 99.540, the market confirmed its breakout through the previous session high after trading up to $0.360 above it intraday.
Daily Candlestick Chart (DXY as at May 22, 2020):
Friday's trading range has been $0.500 (0.5%), that's below the last trading month's daily average range of $0.606. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DXY.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
The contract managed to close back above the 20-day moving average at 99.798 for the first time since May 15th. When this moving average was crossed above the last time on May 11th, DXY actually lost -0.17% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
As prices are trading close to May's low at 98.765, downside momentum might speed up should DXY mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Dollar Index. Out of 121 times, DXY closed higher 51.24% 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 56.20% with an average market move of 0.23%.