U.S. Dollar Index (DX) Futures Technical Analysis – Close Under 92.33 Forms Bearish Closing Price Reversal Top

Lower Treasury yields and increased demand for riskier assets are weighing on the U.S. Dollar Index at the mid-session on Tuesday. The dollar fell from 3-1/2 month highs as U.S. Treasury yields fell as low at 1.5230%, down for a second day and off last week’s high of 1.6250%.

At 16:39 GMT, March U.S. Dollar Index futures are trading 92.00, down 0.344 or -0.37%. That puts its unchanged for the week.

All eyes will now be on the U.S. Federal Reserve’s two-day meeting next week, although expectations are low that the central bank will announce major policy changes after Chair Jerome Powell last week did not express concern about the rise in bond yields.

In other news, House Democrats plan to pass the $1.9 trillion coronavirus relief package on Wednesday morning. They aim to get it to President Joe Biden so he can sign it before key unemployment aid programs expire on Sunday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the downside due to the formation of a closing price reversal top.

A trade through 92.530 will signal a resumption of the uptrend. The main trend will change to down on a move through 89.675.

The minor trend is also up. A trade through 90.635 will change the minor trend to down. This will shift momentum to the downside.

The main range is 94.250 to 89.165. The index is currently testing its retracement zone at 91.710 to 92.310.

The first minor range is 90.635 to 92.530. Its 50% level at 91.580 is the first downside target.

The second minor range is 89.675 to 92.530. Its 50% level at 91.100 is the second downside target.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index into the close will be determined by trader reaction to 92.330.

Bearish Scenario

A sustained move under 92.330 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into a pair of 50% levels at 91.710 and 91.580.

Bullish Scenario

A sustained move over 92.330 will signal the presence of buyers. This will also put the index on the strong side of the retracement zone. If this move can create enough upside momentum then look for the rally to possibly extend into the next main top at 92.730.

Side Notes

A close under 92.330 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

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