U.S. Dollar Index (DX) Futures Technical Analysis – Needs to Hold 94.100 to Sustain Upside Momentum

The U.S. Dollar closed higher against a basket of major currencies on Wednesday as surging energy prices fueled concerns about inflation and interest rate hikes, jarring investors’ appetite for riskier assets and driving flows to safe-havens.

The greenback received a boost after a report showed U.S. private payrolls increased more than expected in September. Private payrolls increased by 568,000 jobs last month, the ADP National Employment Report showed. Data for August was revised lower to show 340,000 jobs added instead of the initially reported 374,000. Economists polled by Reuters had forecast private payrolls would increase by 428,000 jobs.

At 00:27 GMT on Thursday, December U.S. Dollar Index futures are trading 94.245, down 0.027 or -0.03%.

The U.S. payrolls report at the end of the week, which could provide clues to the U.S. Federal Reserve’s next move, remains a point of focus for investors. Friday’s non-farm payrolls data is expected to show continued improvement in the labor market, with a forecast for 473,000 jobs to have been added in September, a Reuters poll showed.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 94.520 will signal a resumption of the uptrend. A move through 92.970 will change the main trend to down.

The minor trend is also up. A trade through 93.680 will change the minor trend to down. This will shift momentum to the downside.

The minor range is 94.520 to 93.680. The index closed on the strong side of its 50% level or pivot at 94.100, making it support.

The short-term range is 92.970 to 94.520. If the minor support fails then look for a break into its retracement zone at 93.745 to 93.520.

Daily Swing Chart Technical Forecast

The direction of the December U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 94.100.

Bullish Scenario

A sustained move over 94.100 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for buyers to make to make a run at 94.520, followed by 94.570 and 94.740.

Bearish Scenario

A sustained move under 94.100 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into a potential support cluster formed by 93.745, 93.680 and 93.560.