U.S. Dollar Index (DX) Futures Technical Analysis – Primary Downside Target is 95.105 – 94.670
The U.S. Dollar closed lower against a basket of major currencies on Tuesday after posting whipsaw-like action as concerns over the omicron COVID-19 variant continued to weigh on stock markets, with investors seeking out safe haven assets. The price action suggests that global investors are selling U.S. stocks and the U.S. Dollar.
On Tuesday, December U.S. Dollar Index futures settled at 96.007, down 0.331 or -0.34%.
Also pressuring the U.S. Dollar was another drop in U.S. Treasury yields early in the session. However, latter in the session, the dollar rebounded after yields came off their lows of the day after Fed Chair Jerome Powell indicated in a Congressional hearing that the central bank may accelerate its tapering of asset purchases.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 93.865 will change the main trend to down. A move through 96.940 will signal a resumption of the uptrend.
The minor trend is also up. A trade through 95.525 will change the minor trend to down. This will shift momentum to the downside.
On Tuesday, the December U.S. Dollar Index settled slightly above a 50% level at 95.955, making it support.
On the upside, the nearest targets are a pair of 50% levels at 96.235 and 96.500.
On the downside, the support is a series of retracement levels at 95.405, 95.105 and 94.670.
The retracement zone at 95.105 to 94.670 is the primary downside target and the best support.
Daily Swing Chart Technical Forecast
The direction of the December U.S. Dollar Index early Wednesday is likely to be determined by trader reaction to 95.955.
A sustained move over 95.955 will indicate the presence of buyers. If this generates enough upside momentum then look for a test of 96.235, followed by 96.500. The latter is the last potential resistance before the 96.940 main top.
A sustained move under 95.955 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 95.540 and 95.525.
Taking out 95.525 will change the minor trend to down. This could trigger a break into the retracement zone at 95.105 to 94.670.
Since the main trend is up, buyers are likely to come in on a test of 95.105 to 94.670.