US Dollar Index

U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 90.070 Sets Short-Term Tone

The U.S. Dollar is edging up against a basket of major currencies on Monday, recovering from Friday’s drop in U.S. jobs data which was below expectations.

The jobs data was seen as a relief for markets because it showed a pick-up in job growth was not strong enough to raise expectations for the U.S. Federal Reserve to tighten its monetary policy any sooner, hurting the dollar, Reuters wrote.

At 10:56 GMT, June U.S. Dollar Index futures are trading 90.170, up 0.037 or +0.04%.

Volume is a little light early in the session amid caution ahead of U.S. inflation data and the European Central Bank meeting on Thursday.

In other news, speculators decreased their net short dollar positions in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Friday’s closing price reversal top may have slowed down the upside momentum. A trade through 90.625 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 89.650 will change the main trend to down.

The minor range is 89.515 to 90.625. Its 50% level at 90.070 is potential support. This level is currently being tested.

The short-term range is 91.435 to 89.515. Its retracement zone at 90.475 to 90.700 is resistance. This zone stopped the rally on Friday. It’s also a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index is likely to be determined by trader reaction to the minor pivot at 90.070.

Bullish Scenario

A sustained move over 90.070 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into a series of potential resistance levels including the short-term 50% level at 90.475, the reversal top at 90.625 and the short-term Fibonacci level at 90.700.

Bearish Scenario

A sustained move under 90.070 will signal the presence of sellers. This could trigger a sharp break into the main bottom at 89.650. Taking out this level will change the main trend to down with 89.515 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.