U.S. Dollar Index (DX) Futures Technical Analysis – Firms after Powell Reiterates Pledge to Price Stability

James Hyerczyk
Updated: Jun 20, 2022, 01:43 GMT+00:00

In U.S. economic news, the Federal Reserve released a report showing industrial production increased by less than expected in the month of May.

US Dollar Index

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The U.S. Dollar is trading higher against a basket of currencies late Friday, on the back of comments from Federal Reserve Chairman Jerome Powell that reiterated the central bank’s commitment to price stability.

Powell also said the Fed’s rate hikes have been contributing to the confidence in the currency. The Chairman also added the central bank is acutely focused on returning inflation to its 2% mandate.

At 19:01 GMT, September U.S. Dollar Index futures are trading 104.465, up 1.048 or 1.01%. The Invesco DB US Dollar Index Bullish Fund is at $27.94, up $0.27 or +0.98%.

US Economic Data Shows Weakens

In U.S. economic news, the Federal Reserve released a report showing industrial production increased by less than expected in the month of May.

The central bank reported industrial production crept up by 0.2% in May after surging by an upwardly revised 1.4% in April. Economists were looking for a 0.4% increase compared to the 1.1% jump originally reported the previous month.

In another report, the Conference Board showed continued weakness in its May Leading U.S. Economic Indicators report. The data showed the CB’s leading economic index fell by 0.4% in May, matching the revised drop seen in April as well as economist forecasts.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the confirmation of Wednesday’s closing price reversal top.

A trade through 105.475 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 101.445 will change the main trend to down.

The minor trend is also up. A trade through 102.005 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is 105.475 to 103.200. The market is trading on the strong side of its pivot at 104.340, making it support.

The short-term range is 101.170 to 105.475. Its retracement zone at 103.320 to 102.815. This zone stopped the selling at 103.200 on Thursday.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at 104.340 is likely to determine the direction of the September U.S. Dollar Index into the close on Friday.

Bullish Scenario

A sustained move over 104.340 will indicate the presence of buyers. If this move generates enough upside momentum then look for a possible surge into the main top at 105.475.

Bearish Scenario

A sustained move under 104.340 will signal the presence of sellers. If this move creates enough downside momentum then look for a late session break into the short-term retracement zone at 103.320 to 102.815.

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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