U.S. Dollar Index (DX) Futures Technical Analysis – Primary Upside Target is 91.710 – 92.310 Retracement Zone

The U.S. Dollar is edging higher against a basket of major currencies early Thursday as steady U.S. Treasury yields lent some support ahead of a key speech by Federal Reserve Chairman Jerome Powell that may set the near-term tone for global bond markets and currencies.

At 09:50 GMT, March U.S. Dollar Index futures are trading 91.200, up 0.258 or +0.28%.

The dollar is currently trading at a seven-month high against the Japanese Yen and a 5-month high against the Swiss Franc. The Euro and British Pound are also inching lower against the greenback.

“Comments that he (Powell) is monitoring events in the Treasury market might be enough to calm things down, encourage a return to high yield FX and a softer dollar but no such concern would suggest the Fed is happy for U.S. Treasury yields to ‘find the right level’ – as our bond strategy colleagues say – potentially triggering another spike in U.S. yields and more dollar short-covering,” ING said in a note to clients.

Daily March U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 91.605 will change the main trend to up. A move through 89.675 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum. A trade through 90.635 will change the minor trend to down. A trade through the minor top at 91.405 will indicate the buying is getting stronger.

The short-term range is 89.165 to 91.605. Its retracement zone at 90.385 to 90.095 is support.

The main range is 94.250 to 89.165. Its retracement zone at 91.710 to 92.310 is the primary upside target.

The minor range is 91.405 to 90.635. The index is trading on the strong side of its pivot at 91.020 early Thursday.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March U.S. Dollar Index on Thursday will be determined by trader reaction to 91.020.

Bullish Scenario

A sustained move over 91.020 will indicate the presence of buyers. This could trigger a surge into 91.405. Taking out this level will likely lead to a test of 91.605 to 91.710. We could see sellers on the first test of 91.710, but it’s also a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 91.020 will signal the presence of sellers. If this creates enough downside momentum then look for a possible break into 90.635. If this level fails then momentum will shift to the downside with 90.385 to 90.095 the next likely downside target.

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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.