U.S. Dollar Index (DX) Futures Technical Analysis – Minor Trend Turns Down as Risk Appetite Returns

The safe-haven U.S. Dollar is under pressure against a basket of major currencies on Monday and riskier assets outperformed as risk appetite improved on optimism that lawmakers in Washington will reach a deal for new stimulus to blunt the economic impact of the coronavirus.

At 14:57 GMT, September U.S. Dollar Index futures are trading 93.445, down 0.464 or – 0.49%.

The index started out weaker on Monday on the stimulus hopes and as doctors said that U.S. President Donald Trump could be discharged from the hospital where he is being treated for COVID-19.

U.S. House Speaker Nancy Pelosi said on Sunday progress was being made on coronavirus relief legislation. Failure to reach a deal, however, would likely be positive for the dollar.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a move through 92.755. A trade through 94.795 will signal a resumption of the uptrend.

The minor trend is down. The minor trend changed to down earlier today when sellers took out 93.565. The move shifted momentum to the downside. A trade through 94.090 will change the minor trend to up.

The main range is 97.785 to 91.750. Its retracement zone at 94.770 to 95.480 is the primary upside target and potential resistance. It stopped the buying at 94.795 on September 25.

The minor range is 92.755 to 94.795. Its 50% level at 93.775 is resistance.

The short-term range is 91.750 to 94.795. Its 50% level at 93.275 is the next downside target. This is the last potential support before the 92.755 main bottom.

Daily Swing Chart Technical Forecast

With the minor trend down, look for the pressure to continue as long as the market stays below 93.775. The first downside target is the 50% level at 93.275. Since the main trend is up, buyers could come in on the first test of this level. If it fails then look for a possible acceleration to the downside with 92.755 the next potential downside target.

Overcoming 93.775 will indicate the return of buyers. This could lead to a test of 94.090. Taking out this level will change the minor trend to up. This will shift momentum to the upside.

Side Notes

Appetite for risk will be bearish for the U.S. Dollar, but the index could turn higher quickly due to the extra layer of uncertainty over President Trump’s health and how the U.S. November 3 presidential election will play out. The dollar could plunge, however, if a stimulus deal is reached.

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