U.S. Dollar Index (DX) Futures Technical Analysis – Strenghtens Over 92.765, Weaken Under 92.535

The U.S. Dollar is trading flat against a basket of major currencies late in the session on Monday after hitting a two-week low earlier in the session. The price action was lackluster and the volume light, which suggests the attempt to claw back the earlier losses may have been fueled by short-covering and position-squaring ahead of Friday’s U.S. Non-Farm Payrolls report.

At 19:56 GMT, September U.S. Dollar Index futures are trading 92.695, up 0.001 or +0.00%.

Expectations are for non-farm payrolls to increase by 750,000 in August, with the unemployment rate forecast to dip to 5.2% from 5.4%. Other data likely to be eyed this week include inflation figures from Europe as well as gauges of the U.S. and Chinese manufacturing sectors.

The dollar index fell sharply on Friday after somewhat dovish comments from Fed Chairman Jerome Powell. In his speech, Powell said tapering could begin this year, but the central bank was in no hurry to raise interest rates. This spooked bullish dollar investors who were betting on an earlier tapering by the Fed.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Friday. A trade through 92.595 will re-establish the downtrend, while a move through 92.470 will reaffirm it. The main trend will change to up on a move through 93.195.

The short-term range is 91.780 to 93.750. The index is currently testing its retracement zone at 92.765 to 92.535.

The minor range is 93.750 to 92.595. Its retracement zone at 93.175 to 93.310 is potential resistance.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar early Tuesday is likely to be determined by trader reaction to the short-term 50% level at 92.765.

Bullish Scenario

A sustained move over 92.765 will indicate the presence of buyers. This could trigger a quick surge into a minor pivot at 92.895. Since the main trend is down, sellers could come in on the first test of this level.

Overtaking 92.895 will indicate the buying is getting stronger. This could fuel a further rally into a resistance cluster at 93.175 to 93.195.

Bearish Scenario

A sustained move under 92.765 will signal the presence of sellers. The first downside targets are the short-term Fibonacci level at 92.535, followed closely by a main bottom at 92.470. The latter is a potential trigger point for an acceleration to the downside with the main bottom at 91.780 the next potential target.