The DXY is hovering just above its long-awaited crossroads at 80.50

FXstreet.com (Barcelona) - For days, those bullish on the DXY were screaming about how yields were flying while the DXY remained subdued. Well, on Tuesday they moved in tandem to the downside – right in the face of the complaining bulls.

DXY faces make or break time with news flow ready to ramp up

As we head into a relatively heavy three days in terms of news flow and headline risk, the US Dollar index is facing key technical support at 80.50 – just ticks below Tuesday’s intraday low of 80.75. With the EUR/USD already hitting and even surpassing its upside target Tuesday, there is a chance that 80.75 may mark a low for the DXY for this move. The FOMC policy meeting minutes and news / updates on Fed tapering plans will almost certainly determine whether the DXY holds support (and whether the EUR/USD fails at resistance).

Technical outlook for DXY

Technicians have been calling for a move lower in the DXY to around the 80.50 area before a fairly substantial up move to 85 – 88 is expected. Is Tuesday’s low of 80.75 “close enough”? We should get the answer to that question by the close of this week.