U.S. Dollar Index (DX) Futures Technical Analysis – Rangebound Ahead of Powell’s Speech on Friday

The U.S. Dollar is trading flat-to-higher against a basket of major currencies on Thursday, holding above a week-long low amid concerns that the highly contagious Delta variant of the coronavirus could derail the global economic recovery.

At the same time, gains are also being capped by sellers betting that Fed Chair Jerome Powell will deliver a dovish speech about tapering its stimulative bond-buying program when he speaks on Friday.

So let’s just call it neutral ahead of U.S. economic reports on Preliminary GDP and Weekly Unemployment Claims.

At 07:33 GMT, September U.S. Dollar Index futures are trading 92.940, up 0.108 or +0.12%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on August 20.

A trade through 93.750 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 92.740

The short-term range is 92.470 to 93.750. The index is currently trading on the weak side of its retracement zone at 92.960 to 93.110.

The new minor range is 93.750 to 92.815. Its retracement zone at 93.285 to 93.395 is the next upside target and potential resistance.

The main range is 91.780 to 93.750. Its retracement zone at 92.765 to 92.535 is the main support. This zone is also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 92.960.

Bearish Scenario

A sustained move under 92.960 will indicate the presence of sellers. The first downside targets are 92.815 and 92.765. The latter is a potential trigger point for an acceleration to the downside with 92.535 to 92.470 the next likely downside targets.

Bullish Scenario

A sustained move over 92.960 will signal the presence of buyers. This could trigger an acceleration to the upside with 93.11 to 93.14 the next upside target. Taking out 93.14 could trigger a surge into the minor retracement zone at 92.285 to 93.395.