U.S. Dollar Index (DX) Futures Technical Analysis – Sellers Could Be Eyeing April 17, 2018 Main Bottom at 89.230

The U.S. Dollar is trading lower against its major counterparts early Wednesday with the index hovering just above its 2-1/2 low reached a couple of weeks ago. Sellers hit the dollar for a third session this week as they looked beyond a new delay in additional stimulus for Americans, while maintaining bets that added financial aid would be forthcoming shortly.

At 08:59 GMT, March U.S. Dollar Index futures are trading 89.850 down 0.068 or -0.08%.

The greenback hit its weakest level in more than two years against the Euro, the Australian and New Zealand Dollars. The greenback also crashed to the lowest level in more than five years against the Swiss Franc and fell broadly against Asian currencies.

The dollar has fallen steadily since U.S. President Donald Trump signed a coronavirus aid and spending bill on Sunday, because more stimulus for the world’s largest economy reduces demand for the perceived safety of holding the greenback.

On Tuesday, U.S. Senate Majority Leader Mitch McConnell blocked immediate consideration of a measure to increase COVID-19 relief payments to $2,000, thereby dampening the bill’s chances of becoming a law. Therefore, passing the bill would be a huge surprise. This would likely crush the U.S. Dollar against all major currencies.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 89.640 will reaffirm the downtrend. The trend is safe for now with the nearest main top dropping in at 92.730.

The minor trend is also down. A trade through 90.950 will change the minor trend to up. This would sift momentum to the upside.

The minor range is 91.150 to 89.640. Its 50% level at 90.395 is resistance.

The main range is 92.730 to 89.640. If the minor trend changes to up then its retracement zone at 91.185 to 91.550 will become the primary upside target area.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index into the close on Wednesday will be determined by momentum.

Bearish Scenario

If the downside momentum continues then look for sellers to make a run at 89.640. If this level fails as support then look for the break to possibly extend into the April 17, 2018 main bottom at 89.230. This is followed by the March 27, 2018 main bottom at 88.940. This is the trigger point for an acceleration into the February 16, 2018 bottom at 88.250.

Bullish Scenario

A strong short-covering rally could shift momentum to the upside. If the move can create enough upside momentum then the pivot at 90.395 will become a reasonable upside target.

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