U.S. Dollar Index (DX) Futures Technical Analysis – Euro Weakness Could Spike Prices into 93.900 – 94.090

The U.S. Dollar is holding onto gains against most major currencies early Wednesday as renewed questions about a coronavirus vaccine and another stalemate over an agreement on additional U.S. fiscal stimulus prompted a shift into safe-haven assets.

The dollar is also being helped by a weaker Euro and British Pound, which are likely to extend their declines as the return of restrictions on economic activity in Europe and Britain to battle a second wave of coronavirus infections unnerves investors.

At 03:22 GMT, December U.S. Dollar Index futures are trading 93.530, down 0.006 or -0.01%.

The Sterling also took a hit due to worries about little progress in trade talks between Britain and the European Union and the chance the Bank of England will adopt negative interest rates.

Risk appetite will essentially guide the price action on Wednesday.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. The main trend will change to down on a trade through 92.755. A move through 94.795 will reaffirm the uptrend.

The minor trend is down. This is controlling the momentum. A trade through 93.000 will signal a resumption of the minor trend. The minor trend will change to up on a move through 93.975. The move will be reaffirmed on a trade through 94.090.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the December U.S. Dollar Index on Wednesday will be determined by trader reaction to the pivot at 93.545.

Bullish Scenario

A sustained move over 93.545 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the second pivot at 93.900, followed by the pair of minor tops at 93.975 and 94.090. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 93.545 will signal the presence of sellers. This could trigger a break into the pivot at 93.275. This is the last potential support before the 93.000 minor bottom.

Side Notes

There’s chatter in the Forex market that there are a lot of long Euro traders in the market that may have to be liquidated. Look for a strong rally in the U.S. Dollar Index if the Euro plunges. The single-currency represents 57% of the index.