U.S. Dollar Index (DX) Futures Technical Analysis – Straddling 92.175 Pivot Ahead of Tuesday’s CPI Report

The U.S. Dollar is trading higher against a basket of currencies on Monday as investors position-themselves ahead of the release of the June U.S. consumer price inflation (CPI) report on Tuesday.

Economists polled by Reuters expect U.S. core consumer inflation in June to have risen 0.4% from May and 4.0% from a year earlier after two straight months of sharp gains in prices.

At 14:22 GMT, the September U.S. Dollar Index is trading 92.325, up 0.209 or +0.23%.

Looking ahead to Tuesday, any signs that inflation could be more persistent than previously thought could fan expectations the Fed may exit from current pandemic-era stimulus earlier, supporting the dollar against other major currencies.

Conversely, more benign data could lead investors to think the U.S. central bank can afford to maintain an easy policy framework for longer, encouraging more bets on risk assets, including risk-sensitive currencies, according to Reuters.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 91.995 will change the main trend to down. A move through 92.840 will signal a resumption of the uptrend.

The minor range is 91.505 to 92.840. The index is currently straddling its 50% level or pivot at 92.175.

On the upside, the nearest resistance is the Fibonacci level at 92.495.

On the downside, the nearest support is a price cluster at 91.950 to 91.850. This is followed by a 50% level at 91.490.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index on Monday is likely to be determined by trader reaction to the pivot at 92.175.

Bullish Scenario

A sustained move over 92.175 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the index to breakout above the long-term Fibonacci level at 92.495 with 92.840 the primary upside target.

Bearish Scenario

A sustained move under 92.175 will signal the presence of sellers. Taking out the intraday low at 92.075 will indicate the selling is getting stronger with near-term targets lined up at 91.995, 91.950 and 91.850.

A failure to hold 91.850 could trigger an acceleration into the next potential support cluster at 91.505 to 91.490.