U.S. Dollar Index (DX) Futures Technical Analysis – Reversal Top Confirmed with 95.620 Pivot Setting the Tone

The U.S. Dollar is trading lower against a basket of major currencies on Thursday after posting a potentially bearish closing price reversal top the previous session. The price action isn’t indicating a change in trend, but a move designed to alleviate some of the recent upside pressure. During the Asian session, the dollar is losing ground to the Euro, British Pound and the Japanese Yen.

At 10:35 GMT, December U.S. Dollar Index futures are trading 95.745, down 0.084 or -0.09%.

Strong U.S. retail sales data earlier this week added fuel to the dollar’s recent rally, which started last week after a strong U.S. inflation print bolstered market bets that the Federal Reserve will have to raise rates around the middle of next year.

On Thursday, a report on the number of jobless claims filed during the week-ended November 13 is due to be released at 13:30 GMT. Economists polled by Dow Jones are expecting initial filings for unemployment insurance fell to 260,000 last week, from the previous week’s 267,000 claims.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower after the confirmation of Wednesday’s closing price reversal top earlier in the session.

A trade through 96.270 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 93.865 will change the main trend to down.

The minor trend is up. A trade through 94.965 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is 94.965 to 96.270. Its 50% level at 95.620 is the first downside target. Since the main trend is up, buyers could come in on a test of this level.

The second minor range is 93.865. Its 50% level at 95.070 is the next potential downside target.

The short-term range is 93.265 to 96.270. If the minor trend changes to down then look for the selling to possibly extend into its retracement zone at 94.770 to 94.415.

Daily Swing Chart Technical Forecast

The direction of the December U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 95.620.

Bullish Scenario

A sustained move over 95.620 will indicate the presence of buyers. The first upside target is 95.965, followed by 96.27. Taking out this level will signal a resumption of the uptrend and could lead to a test of the long-term 50% level at 96.500.

Bearish Scenario

A sustained move under 95.615 will signal the presence of sellers. This could trigger an acceleration to the downside with 95.070 the next downside target, followed by the minor bottom at 94.965. This is the last support before the major retracement zone at 94.770 to 94.415.