U.S. Dollar Index (DX) Futures Technical Analysis – Strenghens Over 96.500, Weakens Under 95.955

The U.S. Dollar closed flat against a basket of major currencies following the release of a mixed U.S. labor market report. The headline number disappointed by missing the forecast, but the unemployment rate fell to a 21-monthh low, signaling a tightening in the jobs market.

Dollar investors showed little reaction to a drop below 1.4% in the U.S. 10-year bond yield, but seemed to think the report was strong enough to keep the Fed on-track for a faster pace of tapering and a sooner-than-previously-anticipated rate hike.

On Friday, December U.S. Dollar Index futures settled at 96.114, down 0.044 or -0.05%. The Invesco DB US Dollar Index Bullish Fund (UUP) ETF finished at $25.78, unchanged.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 96.940 will signal a resumption of the uptrend. A move through 93.865 will change the main trend to down.

The minor trend is also up. A trade through 95.525 will change the minor trend to down. This will shift momentum to the downside.

On Friday, the December U.S. Dollar Index settled on the strong side of a pivot at 95.953, making its support.

The next potential support is a pivot at 95.405, followed by the short-term retracement zone at 95.105 to 94.670.

On the upside, potential resistance targets come in at 96.235 and 96.500.

Short-Term Outlook

The direction of the December U.S. Dollar Index early Monday is likely to be determined by trader reaction to 95.955.

Bullish Scenario

A sustained move over 95.955 will indicate the presence of buyers. This could trigger a labored rally with potential target coming in at 96.235 and 96.500. The latter is a potential trigger point for an acceleration to the upside with 96.940 the next likely target.

Bearish Scenario

A sustained move under 95.955 will signal the presence of sellers. This could trigger an acceleration to the downside with the nearest target a potential support cluster at 95.540, 95.525 and 95.405.

If 95.405 fails as support then look for the selling to possibly extend into the short-term retracement zone at 95.105 to 94.670. Since the main trend is up, buyers could come in on the first test of this area.