US Dollar Index

U.S. Dollar Index (DX) Futures Technical Analysis – Close Over 90.215 Could Signal Shift in Momentum

The U.S. Dollar is trading lower at the mid-session on Monday after hitting a 2-1/2 month low earlier in the session as investors continued to assess the impact of Friday’s weaker-than-expected U.S. jobs report on Fed policy.

The dollar was lower, not only because of the prospect of a slower U.S. economic recovery, but also because the Fed’s stimulative policies – including its $120 billion a month in asset purchases – are expected by some to increase inflation and therefore lower the value of the dollar.

At 18:01 GMT, June U.S. Dollar Index futures are trading 90.130, down 0.086 or -0.10%.

Helping to prop up the index and perhaps prevent another steep sell-off are a slight rise in U.S. Treasury yields.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 90.015 will signal a resumption of the downtrend.

A move through 91.435 will change the main trend to down, but due to the prolonged move down in terms of price and time, the index is inside the window of time for a closing price reversal bottom.

The nearest resistance is a retracement zone at 91.110 to 91.565.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index into the close will be determined by trader reaction to 90.215,

Bearish Scenario

A sustained move under 90.215 will indicate the presence of sellers. Taking out the intraday low at 90.015 will indicate the selling pressure is getting stronger. This could trigger an acceleration into the February 25 main bottom at 89.655.

Bullish Scenario

A sustained move over 90.215 will signal the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor pivot at 90.725 followed by the Fibonacci level at 91.112.

Side Notes

A close over 90.215 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.