U.S. Dollar Index (DX) Futures Technical Analysis – Major Upside Target is 94.770 – 95.480 Retracement Zone

The U.S. Dollar rose against a basket of major currencies on Monday on skittishness over the U.S. presidential election. The dollar index reached a one-month high against its peers as risk sentiment, which has grown over the past week, remained sour on election jitters and as expected volatility in major currencies rose to its highest level since April.

At 20:14 GMT, December U.S. Dollar Index futures are trading 94.120, up 0.078 or +0.08%.

In economic news, the dollar received a lift after a report showed U.S. manufacturing activity accelerated more than expected last month, with new orders jumping to their highest in nearly 17 years. The manufacturing purchasing managers’ index (PMI) survey eased growing concerns about economic growth in the face of a resurgent pandemic.

In other news, U.S. Treasury yields mostly drifted lower as investors braced for an eventual week that includes a Federal Reserve meeting and the October unemployment report.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up last week when buyers took out the previous main top at 93.925. The main trend changes to down on a move through the last swing bottom at 92.460.

The short-term range is 91.750 to 94.795. Its 50% level at 93.275 is potential support.

The main range is 97.785 to 91.750. Its retracement zone at 94.770 to 94.480 is the primary upside target and potential trigger point for an acceleration to the upside.

Short-Term Outlook

The current move is all about momentum. If the upside momentum continues then look for buyers to take a run at the resistance cluster at 94.795 – 94.770.

Taking out 94.770 could trigger an acceleration to the upside with the main Fibonacci level at 95.480 the next potential upside target. This is also the trigger point for an even bigger breakout to the upside.

If the upside momentum stops and the index begins to reverse to the downside then look for the selling to possibly extend into the short-term 50% level at 93.275.

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