DXY rallies to finish near highs of the session but still lingers below 80.75 resistance

FXstreet.com (Barcelona) - The US Dollar Index (DXY) rallied into the US open and managed to hold most of the gains into the close despite finishing off the highs. Everything early this week is a prelude to the major data points due out at the end of the week.

DXY to be pushed around by data mostly from outside the US Wednesday

While the big US data is not due out until later this week, Wednesday’s action in DXY will be primarily driven by news and events outside the US. The scheduled news flow includes: the Bank of Japan’s policy meeting minutes; Ausrtalian Trade Balance; European Services PMIs; European Retail Sales; British Production data; German Factory Orders; US Challenger Job Cuts data and the Conference Board’s Index of Leading Economic Indicators for the US.

Technical outlook for the DXY

Technicians say the DXY is bumping once again into horizontal line resistance (from the 10/21/13 peak) at 80.75. The next resistance above that is the 9/16 close (and lower edge of downside gap) at 81.29. Support comes in at the first two meaningful Fibonacci retracements of the recent rally at 80.11 and 79.90.