The US Dollar Index finished last week marginally in the red, although the greenback did start to attract buying interest into the weekly price close.
US Dollar Index technical analysis shows that a major directional move could be on the horizon.
US Dollar Index medium-term price trend
The US Dollar Index lost ground against a basket of currencies last week, due an improvement in overall risk-sentiment.
Improving economic data is raising investors hope that the global economy could bounce back strongly after the global lockdown comes to an end.
US Dollar Index technical analysis over the medium-term shows that the index remains vulnerable to further losses while price trades below the 101.00 level.
The daily time frame shows that a bearish breakout from a rising wedge pattern remains the central focus on the daily time frame.
A bearish breakout from the wedge pattern remains in play while price trades below the 101.00 resistance level.
According to the size of the wedge pattern the US dollar index could decline towards the 90.00 level over the medium-term.
Overall, the pattern indicates more downside for the greenback. However, the greenback has been incredibly choppy lately, and has no clear price trend.
US Dollar Index short-term price trend
DXY analysis shows that the index has a bearish short-term trading bias while the price trades below the 98.80 level.
The lower time frames continue to show that the index is trapped within a horizontal price channel, between the 98.20 to 101.90 levels.
Typically, when price is contained within a range for an extended period then explosive moves often follow once price breaks from this range.
Once the 98.20 to 101.90 range is broken, the US dollar index could see a directional move of around 370 points taking place.
US Dollar Index technical summary
DXY analysis shows that a major directional move is likely to occur once the greenback finally breaks from its established price range.