The US dollar index is about to post the third weekly decline in a row and the lowest monthly close since October. The greenback opened the week sharply lower after the French election results and was unable to recover.
On Friday, the DXY remained inside the range of the previous days, moving between 99.20 and 98.50; consolidating the decline of the weekly opening.
Next week the range is likely to be challenged taking into account the key events that will take place in the US. The Federal Reserve will have its 2-day meeting (no change is expected) and on Friday, the Labor Department will release its official report.
The rally of European currencies was behind the decline of the US dollar index. While EUR/USD and GBP/USD reached monthly highs, the greenback remained strong against commodity currencies. It bounced versus the Japanese yen, erasing April’s losses.
Below key trend line
The index continues to slide after finding resistance two weeks ago around 101.00, where a bearish trend line stands. It respected the dynamic resistance and turned to the downside. At the beginning of the week, it broke a medium-term bullish trend line and remained below at all times.
The daily chart shows risk tilted to the downside, as long as the index holds under 99.40. While on the opposite direction, if it rises on top of 100.80 (downtrend line) the DXY would regain strength.