U.S. Dollar Index (DX) Futures Technical Analysis – Bulls Facing Challenge at 91.64 – 91.71 Resistance Cluster

The U.S. Dollar climbed for a fifth straight session on Thursday on confidence in the U.S. economic outlook and the possibility that Friday’s jobs report might be stronger than expected.

This assessment was reinforced on Thursday when the U.S. government said the number of Americans filing new applications for unemployment benefits decreased last week. Initial claims for state unemployment benefits totaled a seasonally adjusted 779,000 last week, better than economists had forecast and better than 812,000 in the prior week.

At 21:31 GMT, March U.S. Dollar Index futures are trading 91.525, up 0.377 or +0.41%.

The dollar was also supported by a rise in longer-term U.S. Treasury yields as investors positioned for a large pandemic relief package from Washington and a stabilizing U.S. labor market. The benchmark 10-year yield was up 1.5 basis points in morning trading at 1.146% and at one point reached 1.16%, its highest since January 12.

Meanwhile, Democrats in the U.S. Senate were poised for a marathon “vote-a-rama” session aimed at overriding Republican opposition to President Joe Biden’s $1.9 trillion COVID-19 relief proposal.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 91.585 will signal a resumption of the uptrend. A trade through 90.030 will change the main trend to down.

On the downside, support is a series of retracement levels at 91.370, 91.165 and 90.950. The next potential upside target is a resistance cluster at 91.640 to 91.710.

Short-Term Outlook

Friday will mark the 11^th session up from the 90.030 bottom on January 21. This puts the index inside the window of time for a potentially bearish closing price reversal top chart pattern.

This chart pattern won’t change the main trend to down, but if confirmed, it could trigger the start of a two to three day pullback.

A sustained move over 91.710 will indicate the buying is getting stronger with 92.310 a potential upside target, while a failure to hold 90.950 could trigger an acceleration to the downside.

Trading between 90.950 and 91.710 could lead to a mostly sideways trade.

For a look at all of today’s economic events, check out our economic calendar.