The U.S. Dollar Index ($DXY) is on the move to the upside in recent weeks, gaining about 2% since its relative lows on Jun. 4 as of yesterday’s close. This happens as the Japanese yen is near a 38-year low versus the greenback, and as traders continue to be on the lookout over possible intervention from the Japanese government to prop up the currency.

The dollar recently pushed above several commonly followed moving averages, such as the 21-day, 63-day, and 252-day exponential moving averages. All these indicators are now trending upward as well, which suggests the trend is more geared toward the upside. However, the overall shape of the price action is rather triangular. There’s a downward trendline starting with the 52-week highs and connecting the subsequent lower highs from April, and an accompanying upward trendline starting with the Mar. 11 lows. Price is oscillating in an increasingly narrowing range, which means price action could be primed for a breakout.

For now, price seems to be more geared toward the upside. The Relative Strength Index (RSI) is showing some bullish activity, as it has made increasingly higher lows since the end of 2023. It also recently crossed above the 50-midline, signifying momentum has shifted toward the bullish side of the camp.

If price pushes above the previously mentioned downward trendline starting with the 52-week highs, the next point of resistance could be the area near 106.51. This is the site of the highs after a small gap downward on Nov. 2 and is where price reached around the same level in April. To the downside, there is a confluence with the upward trendline and the 252-day EMA near about 104.28.

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