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Dollar Index Registers its Worst Year Since 2017; Eyes on 90.00 Level

The US dollar index (futures) had one of its worst years since 2017 despite the impressive rally to a 3 ½-year high of 103.79 in March.

The index is set to post a yearly loss of around 7.0% and unless the 90.00 barrier puts breaks to the sell-off, the market could depreciate towards the 2018 troughs registered within the 88.88 – 88.40 zone. This is also where the 61.8% Fibonacci of the 2013 – 2017 upleg is placed, hence it is expected to attract special attention.

From a technical perspective, the above scenario cannot be brushed aside in the weekly chart since the MACD is resuming negative momentum below its red signal line, while the RSI and the Stochastics have yet to bottom in the oversold territory.

Should the 90.00 level provide a strong footing, the bulls should sail above the 50% Fibonacci of 91.35 to re-challenge the 92.80 – 93.20 restrictive area. Above the latter, a tougher obstacle could occur in the crossroads of the 20-weekly exponential moving average (EMA) and the 38.2% Fibonacci at 94.30.

In brief, the US dollar index is looking bearish in the weekly chart and it will be interesting to see if the 90.00 level can halt the selling pressure in the short-term.