Dollar Index Breaks Below 100-Week MA, Two Bearish Candles Emerge — 100.7 Becomes Key Validation Level
nashnova research
The dollar index rallied 2.8% and broke above its 100-week moving average, but back-to-back bearish engulfing and bearish harami candles now put the breakout in doubt — 100.7 is the line that decides what comes next.
How far did this rally go?
The dollar index bounced from its mid-September low, gaining a cumulative 2.8% and clearing the 100-week moving average (around 100.7) last week.
The 100-week MA — an average of roughly two years of weekly closes — acts as a long-term bull/bear dividing line. A breakout usually signals a potential trend shift.
But the breakout failed to hold: Friday and Monday each printed a bearish candlestick pattern, and bulls lost their footing.
What do these two bearish patterns actually mean?
Bearish engulfing (Friday): the day's red candle body completely swallowed the prior green candle body. This means → sellers overpowered buyers in a single session; bullish momentum is fading.
Bearish harami (Monday): the day's trading range sat entirely inside the prior candle. In plain terms = the market suddenly froze — neither side dared move first.
Two bearish signals back to back — this reflects weak conviction among the latecomers who chased the breakout. Both bulls and bears are now waiting for confirmation.
Where are the downside levels?
First support: 100.7 (the 100-week MA itself) — a drop below would confirm last week's breakout as a false break.
Second support: the 100 round number — a psychological floor; losing it could accelerate selling.
Ultimate downside target: 98.5980 (the September 9 low). This means → if 100 fails, the entire rally gets erased.
Where are the upside levels?
If Friday's bearish engulfing proves to be just a brief pullback, the first resistance zone sits at 101.63–101.80 — the June and July highs, per LSEG data.
In plain terms = prior highs act like a ceiling — price either gets pushed back down or, once through, accelerates higher.
A clean break above that zone targets 102.87 (the 50% retracement of the January 2025–January 2026 decline), with 104.59 as the next level beyond.
What is the single thing to watch right now?
One line: 100.7 decides direction. Hold it and the rally lives; lose it and the false-breakout call is confirmed.
The next few trading sessions are the verification window. This reflects a core technical principle: whether a breakout *holds* matters more than whether it *happens*.
The battle lines are clear: 98.60 below, 101.80 above — everything in between is the current tug-of-war zone.
市场有风险，内容仅供研究参考，不构成投资建议。