U.S. Dollar Index (DX) Futures Technical Analysis – 90.395 Pivot Controlling the Price Action

The U.S. Dollar is trading firm against a basket of major currencies on Tuesday, but was well below Monday’s spike high, as a new coronavirus strain in Britain sent jitters through holiday-thinned currency markets.

Low liquidity, with many traders logged out for the year, exaggerated the speed and size of the dollar’s gains against other currencies, too, as stop-loss mechanisms dumped investors out of bets against the greenback.

At 08:45 GMT, March U.S. Dollar Index futures are trading 90.175, up 0.226 or +0.25%.

The moves unwound over the New York session, as a Bloomberg report hinted at progress in Brexit trade negotiations and as Congress settled on a U.S. stimulus package, encouraging investors to buy back in to the dollar’s downtrend.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 89.640 will signal a resumption of the downtrend. A move through 92.730 will change the main trend to up.

The minor trend is also down. A trade through 91.150 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 91.150 to 89.640. Its 50% level at 90.395 currently resistance. On Monday, this level was straddled throughout the session.

The short-term range is 92.730 to 89.640. Its retracement zone at 91.185 to 91.550 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to 90.395.

Bearish Scenario

A sustained move under 90.395 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 89.640. Taking out this level could trigger a further decline into the April 17, 2018 main bottom at 89.230.

Bullish Scenario

Overtaking and sustaining a move over 90.395 will signal the presence of buyers. If this is able to generate enough upside momentum then look for a near-term move into 90.950, followed by the resistance cluster at 91.150 to 91.185.

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