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U.S. Dollar Index (DX) Futures Technical Analysis – Needs to Overcome 100.605 to Sustain Upside Momentum

The direction of the June U.S. Dollar Index the rest of the session on Monday is likely to be determined by trader reaction to the minor top at 100.605.
James Hyerczyk
US Dollar

The U.S. Dollar is inching higher against a basket of major currencies on Monday in a lackluster session. The greenback wavered as investor optimism about the re-opening of economies around the world lifted commodity prices and exporters’ currencies, while talk of negative interest rates held the British Pound near an almost two-month low.

At 11:02 GMT, June U.S. Dollar Index futures are trading 100.455, +0.021 or +0.02%.

The greenback may be losing ground to the Aussie and the Kiwi, but those two currencies are not a part of the U.S. Dollar Index. It consists of the Euro, British Pound, Canadian Dollar, Japanese Yen, Swedish Krona, and Swiss Franc.

The price action today suggests a mixed bag of activity with the British Pound and Canadian Dollar trading higher, and the Euro, Japanese Yen and Swiss Franc edging lower.

The price action is likely two sided because traders looking for risk are being helped by the gradual lift of restrictions from New York to Italy, while those worried about risk are keying in on tensions between the United States and China.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 100.605 will signal a resumption of the uptrend. A move through 99.585 will change the main trend to down.

The short-term range is 98.345 to 101.030. Its 50% level at 99.690 is providing support.

The main range is 94.530 to 103.960. Its retracement zone at 99.245 to 98.130 is major support. It is controlling the longer-term direction of the index.

On the upside, the major target is a long-term 50% level at 101.495.

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Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the June U.S. Dollar Index the rest of the session on Monday is likely to be determined by trader reaction to the minor top at 100.605.

Bullish Scenario

A sustained move over 100.605 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the next main top at 100.975, followed by the major 50% level at 101.495.

Bearish Scenario

The inability to overcome 100.605 will indicate the lack of buyers or the presence of sellers. This could lead to a test of Friday’s low at 100.095. If this fails then look for the selling to possibly extend into the 50% level at 99.690, followed by the main bottom at 99.585.

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