U.S. Dollar Index (DX) Futures Technical Analysis – Lackluster Trade Ahead of Monday’s US Bank Holiday

The U.S. Dollar is down shortly after the mid-session on Friday but trading off its lows in a mostly lackluster performance. The move reflected the price action in U.S. Treasury yields.

Volume is below average with most of the major banks and institutions on the sidelines ahead of Monday’s U.S. Memorial Day holiday. Furthermore, the cash U.S. Treasury market closed early, leaving traders without any guidance.

At 18:00 GMT, June U.S. Dollar Index futures are trading 101.650, down 0.208 or -0.20%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) is at $27.17, down $0.05 or -0.18%.

Helping to keep a lid on prices on Friday were dampened expectations for aggressive interest rate hikes by the U.S. Federal Reserve and as improving inflation and consumer spending data eased recession fears.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down earlier in the week. A trade through 105.065 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, the index is ripe for a potentially bullish closing price reversal bottom.

The minor trend is also down. A trade through 102.470 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is 99.810 to 105.065. The index is currently trading on the weak side of its retracement zone at 101.820 to 102.440, making this area resistance.

The main range is 97.730 to 105.065. Its retracement zone at 101.400 to 100.530 is the next downside target. Counter-trend buyers could come in on a test of this area since it represents value.

Daily Swing Chart Technical Forecast

Trader reaction to 101.820 and 101.390 is likely to determine the direction of the June U.S. Dollar Index into the close on Friday.

Look for an upside bias to develop on a sustained move over 101.820 and for the downside bias to continue on a sustained move under 101.390. However, be careful playing for a breakout or breakdown since volume and volatility are at their lows of the session.