US Dollar Index

U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 91.565, Weakens Under 91.110

The U.S. Dollar hit its highest level against a basket of currencies since April 21 on Wednesday, extending a rally as chatter about the possibility of higher U.S. interest rates and a sell-off in tech stocks soured risk sentiment to the benefit of the safe-haven currency.

At 09:17 GMT, June U.S. Dollar Index futures are trading 91.375, up 0.100 or +0.11%.

An early rally by the greenback on Tuesday was partly sparked by comments from U.S. Treasury Secretary Janet Yellen that rate hikes may be needed to stop the economy from overheating. Yellen later downplayed their importance, but even the slightest mention of U.S. tightening has an outsized impact in markets that have become so dependent on monetary stimulus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out another swing top at 91.425. A trade through 90.395 will change the main trend to down.

The short-term range is 89.655 to 93.470. The market is currently testing its retracement zone at 91.110 to 91.565.

The main range is 94.587 to 89.155. Its retracement zone at 91.870 to 92.510 is the primary upside target.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at 91.110.

Bullish Scenario

A sustained move over 91.110 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the short-term 50% level at 91.565. This is a potential trigger point for an acceleration into a minor top at 91.810, followed by the main 50% level at 91.870.

Bearish Scenario

A sustained move under 91.100 will signal the presence of sellers. This could lead to a pullback into a minor pivot at 90.915, followed by the main bottom at 90.395.

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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.