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U.S. Dollar Index (DX) Futures Technical Analysis – In Position to Challenge Major Fibonacci Level at 92.310

By:
James Hyerczyk
Published: Mar 8, 2021, 08:26 UTC

The U.S. Dollar is trading higher against a basket of major currencies on Monday after clawing back from an earlier setback. The intraday rally has put

US Dollar Index

The U.S. Dollar is trading higher against a basket of major currencies on Monday after clawing back from an earlier setback. The intraday rally has put the greenback in a position to challenge Friday’s three-month high.

Traders are saying the dollar is being underpinned after the U.S. Senate passage of a massive stimulus bill sparked another sell-off in the bond market, while commodity-linked currencies retreated as a broader risk-on trade lost momentum.

At 07:58 GMT, March U.S. Dollar Index futures are trading 92.175, up 0.185 or +0.20%.

The Senate passed a $1.9 trillion COVID-19 relief plan, a day after a stunning U.S. jobs report sent the greenback to its highest level since November 2020. The yield on the benchmark U.S. 10-year Treasury hovered near one-year highs on Monday, while U.S. NASDAQ futures fell about 1% and European stock index futures pared gains as the selloff also spread to other higher risk assets.

In other news, speculators cut their net short dollar positions in the latest week to $27.80 billion, which is the smallest short position since December 15 and suggests that dollar bears are giving up on betting against the greenback.

Daily March U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 92.225 will signal a resumption of the uptrend. The next main trend target is the November 23 top at 92.730.

A trade through 89.675 will change the main trend to down. This is highly unlikely. However, since the index is up seven days from the last swing bottom, today’s session starts with the index in a position to post a potentially bearish closing price reversal top.

The main range is 94.250 to 89.165. The index is currently testing the upper level of its retracement zone at 91.710 to 92.310. This zone is controlling the near-term direction of the index.

The minor range is 90.635 to 92.225. Its 50% level at 91.430 is additional support.

Daily Swing Chart Technical Forecast

Given the prolonged move up in terms of price and time, the direction of the March U.S. Dollar Index will likely be determined by trader reaction to 92.00.

Bullish Scenario

A sustained move over 92.00 will indicate the presence of buyers. The first targets are 92.225 and the main Fibonacci level at 92.310.

Taking out 92.310 could generate the upside momentum needed to challenge the November 23 main top at 92.730.

Bearish Scenario

A sustained move under 92.00 will signal the presence of sellers. The first downside target is the main 50% level at 91.710. This is followed by the short-term 50% level at 91.430.

Side Notes

A close under 92.00 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day counter-trend break.

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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