U.S. Dollar Index (DX) Futures Technical Analysis – 90.395 Potential Trigger Point for Surge into 91.185

Safe-haven buyers are driving up the U.S. Dollar against a basket of major currencies early Monday as investors sought protection against the tightening of COVID-19 restrictions in the U.K. and many European countries. Oversold conditions are also contributing to the move with short-sellers booking profits and squaring positions after the U.S. Congress approved a new coronavirus-relief package.

At 04:26 GMT, March U.S. Dollar Index futures are trading 90.375, up 0.422 or +0.47%.

The Sterling was the biggest loser in early Asian trading after Britain imposed tough new restrictions to stem a fast-spreading new coronavirus strain.

Meanwhile, Britain said the European Union must shift position after Brexit negotiators failed to find agreement on the weekend, raising the risk that the U.K. crashes out of the trading bloc’s orbit at the turn of the year with no deal, Reuters wrote.

The negative sentiment overshadowed a weekend deal among U.S. congressional leaders for a $900 billion coronavirus aid package.

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. The main trend will change to up on a move through 92.730.

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 is currently being tested.

The short-term range is 92.730 to 89.640. If the minor trend changes to up then look for a test of its retracement zone at 91.185 to 91.550.

Daily Swing Chart Technical Forecast

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

Bullish Scenario

A sustained move over 90.395 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the resistance cluster at 91.150 to 91.185 over the near-term.

Bearish Scenario

A sustained move under 90.395 will signal the presence of sellers. This could lead to a quick break into 90.030, followed by 89.640. If this level fails then look for the move to extend into the April 17, 2018 main bottom at 89.230.