U.S. Dollar Index (DX) Futures Technical Analysis – Rally Falls Short of Retracement Zone TargetThe short-term range is 103.960 to 98.345. Its retracement zone at 101.155 to 101.815 is the first upside target. This zone surrounds a long-term 50% retracement level at 101.495.
The U.S. Dollar is marginally higher against a basket of major currencies at the mid-session in a mostly lackluster trade. Of the major components, the Euro is trading slightly lower, but this is being offset by a slight rise in the British Pound. The Canadian Dollar is trading better as traders await more news regarding the possible crude oil production cut deal between Russia and Saudi Arabia.
The safe-haven Swiss Franc and Japanese Yen are also under pressure. The Japanese Yen is trading lower after the country reported an increase in coronavirus cases. The government also announced a state of emergency in Tokyo and six other prefectures as early as Tuesday to contain the coronavirus. Meanwhile, the government is preparing a $990 billion stimulus package to soften the economic blow.
At 13:12 GMT, June U.S. Dollar Index futures are trading 100.720, up 0.043 or +0.04%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 98.345 will change the main trend to down. A move through 103.960 will signal a resumption of the uptrend.
The short-term range is 103.960 to 98.345. Its retracement zone at 101.155 to 101.815 is the first upside target. This zone surrounds a long-term 50% retracement level at 101.495.
The main range is 94.530 to 103.960. Its retracement zone at 99.245 to 98.130 is major support. This zone stopped the selling at 98.345 on March 27.
The nearest upside target on Monday is a resistance cluster at 101.460 to 101.495. Sellers could come in on the first test of this area. Overtaking 101.495 could trigger an acceleration to the upside.
On the downside, the first target is an uptrending Gann angle at 99.845. This is followed by another uptrending Gann angle at 99.530.
The market is only up six sessions from its last main bottom. So a higher-high, lower-close will only produce a minor closing price reversal top. Nonetheless, it will still indicate that the selling is greater than the buying at current price levels.