U.S. Dollar Index (DX) Futures Technical Analysis – Could Be Building Support Base for Upside Breakout
The U.S. Dollar was pressured early in the session on Friday as investors jumped back into the Euro then the greenback spent most of the session trying to claw back those earlier losses. Somewhat upbeat U.S. economic data failed to move the needle much and another late session sell-off in the U.S. stock markets did little to drive investors into the safety of the U.S. Dollar.
At 21:00 GMT, December U.S. Dollar Index futures were trading 93.260, down 0.056 or -0.06%.
A strong Euro mostly held the index in check on Friday. The single currency rose from the opening on Friday then sat in a range most of the session despite a drop in Euro Zone bond yields.
Fears that Britain will end its post-Brexit transition period without agreeing any trading arrangements sent the Pound to 5-1/2-month lows on Friday, overshadowing data showing the economy recovering and news of a new trade deal with Japan.
The Canadian Dollar was little changed against its U.S. counterpart on Friday as domestic data showed a drop in industrial capacity to a record low, with the Loonie ending a string of weekly gains.
The Japanese Yen continued to trade in a tight range as investors took to the sidelines ahead of next week’s U.S. Federal Reserve and Bank of Japan monetary policy meetings.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The trend turned up when buyers took out 93.500 on Wednesday. A trade through 93.640 will signal a resumption of the uptrend. The main trend will change to down on a move through 91.750.
The minor trend is also up. The new minor top is 93.640.
The minor range is 91.750 to 93.640. Its retracement zone at 92.695 to 92.470 is support. It stopped the selling at 92.680 on Thursday.
The short-term range is 93.975 to 91.750. Its 50% level at 92.865 has been acting like a pivot. Currently it is support.
The main range is 97.785 to 91.750. If the uptrend continues then its retracement zone at 94.770 to 95.480 will become the primary upside target.
The price action this week suggests there is plenty of support lined up at 92.865, 92.695 and 92.470.
If 92.470 fails then we could see a spike to the downside with support coming in at 91.750.
Any rally is likely to be labored because of the minor top at 93.640, and the main tops at 93.915 to 93.975. The latter is a potential trigger point for an acceleration into at least 94.770.