U.S. Dollar Index (DX) Futures Technical Analysis – Lower on Sluggish Trade Ahead of GDP, Initial Claims Reports

The U.S. Dollar is edging lower against a basket of major currencies on Thursday with most of the losses fueled by a strong Euro. The dollar is also losing ground to the Japanese Yen and holding nearly steady versus the Canadian Dollar and British Pound.

Helping to cap the greenback against the majors is a report from Wednesday that showed U.S. consumer confidence for December hit its highest level since April.

The dollar is also trying to recover from a hit it took earlier in the week after the Bank of Japan unexpectedly tweaked its yield curve controls. The move initially drove global yields higher but they are currently drifting lower as investors bought bonds.

At 10:29 GMT, March U.S. Dollar Index futures are trading 103.575, down 0.272 or -0.26%. On Wednesday, the Invesco DB US Dollar Index Bullish Fund ETF (UUP) settled at $27.93, up $0.05 or +0.18%.

Later today at 13:30 GMT, traders will get the opportunity to react to the Final Third-Quarter U.S. GDP data along with the latest weekly unemployment claims report. It is expected to show jobless claims rose from 211K to 221K.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 102.875 will signal a resumption of the downtrend. A move through 105.445 will change the main trend to up.

The minor trend is also down. A trade through 104.560 will change the minor trend to up. This will shift the momentum.

The index is currently straddling a pair of Fibonacci levels at 103.664 and 103.519. On the downside, the major support is the June 16 main bottom at 102.702. On the upside, resistance is a short-term pivot at 104.160.

Daily Swing Chart Technical Forecast

Trader reaction to 103.664 and 103.519 is likely to determine the direction of the March U.S. Dollar Index on Thursday.

Bullish Scenario

A sustained move over 103.664 will indicate the presence of buyers. If this move generates enough upside momentum then look for a surge into the short-term pivot at 104.825.

Bearish Scenario

A sustained move under 103.519 will signal the presence of sellers. This could trigger the start of an acceleration to the downside with the nearest target the main bottom at 102.875, followed by 102.702.