James Hyerczyk
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The U.S. Dollar slumped to its lowest level against a basket of major currencies since March 4 on Monday as traders continued to react to last week’s plunge in U.S. Treasury yields, which was fueled by the Fed’s reiteration that any spike in inflation is likely to be “transitory”.

On Monday, June U.S. Dollar Index futures settled at 91.050, down 0.494 or -0.54%.

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The greenback’s weakness was pronounced across the board, with the currency hitting multi-week lows against other major peers in the G10 group of currencies, including the Japanese Yen, the Swiss Franc, the Australian Dollar, the New Zealand Dollar and the Euro.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Monday when sellers took out the March 18 main bottom at 91.290.

A trade through 93.470 will change the main trend to up. This is not likely, but the index is down 13 sessions from this main top so Tuesday will begin with the index inside the window of time for a closing price reversal bottom.

The main range is 94.590 to 89.155. The index is trading on the weak side of its retracement zone at 91.870 to 92.510, making it resistance.

The short-term range is 89.655 to 93.470. The index closed on the weak side of its retracement zone at 91.100 to 91.555, making this area another resistance zone.


Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Tuesday is likely to be determined by trader reaction to the short-term Fibonacci level at 91.100.

Bearish Scenario

A sustained move under 91.100 will indicate the presence of sellers. This could create the downside momentum needed to challenge the next main bottom at 90.620. This is a potential trigger point for an acceleration into the February 25 main bottom at 89.655.

Bullish Scenario

A sustained move over 91.100 will signal the presence of buyers. The first upside target is the 50% level at 91.555. This could trigger a further rally into the minor top at 91.810 and other 50% level at 91.870. The trade through 91.810 will also change the minor trend to up. This will shift momentum to the upside.

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