U.S. Dollar Index (DX) Futures Technical Analysis – Failure at 92.680 Could Trigger Steep Break

James Hyerczyk

The tight trading range created by a pair of 50% levels at 92.695 and 93.160 is proving both resistance and support, suggesting impending volatility.

US Dollar Index

The U.S. Dollar is trading weaker against a basket of major currencies, unable to shake off the previous session’s lows on Friday and was set for a weekly fall, losing out to the Japanese Yen in particular, which hit a seven-week high as investors sought the safe-haven currency.

Data released on Thursday showed that the number of people in the United States filing new claims for unemployment benefits fell less than expected, suggesting the country’s market recovery is stalling.

At 16:43 GMT, December U.S. Dollar Index futures are trading 92.88, down 0.089 or -0.10%.

Daily December U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up last week, but the lack of follow-through to the upside and this week’s sideways price action suggests momentum may be shifting to the downside.

A trade through 93.640 will signal a resumption of the uptrend. The main trend changes to down on a trade through 91.750.

The minor trend is also up. A trade through 92.680 will change the minor trend to down. This will confirm the shift in momentum to the downside.

The first minor range is 91.750 to 93.640. Its retracement zone at 92.695 is support.

The second minor range is 93.640 to 92.680. Its 50% level at 93.160 is resistance.

Short-Term Outlook

The tight trading range created by a pair of 50% levels at 92.695 and 93.160 is proving both resistance and support. Trading inside this range suggests impending volatility.

Our charts indicate that we could see an acceleration to the downside if sellers can take out the 50% level at 92.695 and the minor bottom at 92.680. The daily chart also indicates there is plenty of room to the downside with the next major target the 91.75 main bottom.

Overtaking 93.160 will indicate the presence of buyers. However, don’t expect an upside break out unless buyers can overcome the main top at 93.920.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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