U.S. Dollar Index (DX) Futures Technical Analysis – Next Downside Target 89.655; Trend Turns Up Over 91.105
The U.S. Dollar hit its lowest level against a basket of major currencies since February 26 late Wednesday after the Federal Reserve held interest rates unchanged and kept the level of its monthly bond-buying program intact, as expected, but acknowledged the improvement in the U.S. economy.
A 20:08 GMT, June U.S. Dollar Index futures are trading 90.610, down 0.282 or -0.31%.
The dollar initially rose after the release of the Federal Reserve’s monetary policy statement in conjunction with a rise in U.S. Treasury yields on the view that a successful vaccination program and strengthening economic data would prompt the Fed to talk about reducing its bond purchases sooner rather than later.
The greenback gave back its earlier gains after Fed Chair Jerome Powell said in remarks after the central bank statement that it was not the time to talk about tapering its asset purchases.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the intraday low at 90.525 will reaffirm the downtrend. A move through 91.105 will change the main trend to up.
The short-term range is 89.655 to 93.470. Its retracement zone at 91.100 to 91.555 is resistance.
The main range is 94.587 to 89.155. Its retracement zone at 91.870 to 92.510 is the major resistance. This zone is controlling the near-term direction of the index.
Daily Swing Chart Technical Forecast
The direction of the June U.S. Dollar Index into the close on Wednesday will be determined by trader reaction to 90.890.
A sustained move under 90.890 will indicate the presence of sellers. Taking out the intraday low at 90.525 will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside that leads to the eventual test of the February 25 main bottom at 89.655.
A sustained move over 90.890 will signal the presence of buyers. This could trigger a surge into 91.100, followed by 91.105. Overtaking the latter will indicate the buying is getting stronger with the next targets a minor top at 91.425 and a 50% level at 91.555.
A close over 90.890 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.