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U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 90.385, Weakens Under 90.095

By:
James Hyerczyk
Updated: Feb 15, 2021, 10:51 UTC

The direction of the March U.S. Dollar Index on Monday will be determined by trader reaction to the short-term 50% level at 90.385.

US Dollar Index

The U.S. Dollar is trading lower against a basket of major currencies as we begin the week with investors casting doubts over the speed of the recovery from the pandemic in the United States. The dollar index rose earlier in the month on hopes that a U.S. rebound would outpace other major economies, but has since pulled back amid disappointing employment data.

At 09:38 GMT, March U.S. Dollar Index futures are trading 90.315, down 0.155 or -0.17%.

Traders are pressuring the U.S. Dollar in anticipation of weakening U.S. economic data. Over the short-run, the market will be looking for actual evidence that the economy is outperforming. This could cause sideways trading. Wednesday’s release of U.S. Retail Sales data could set the tone.

Daily March U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been clearly to the downside since the formation of the closing price reversal top on February 5.

A trade through 90.030 will change the main trend to down. The uptrend will resume on a trade through the last main top at 91.605.

The minor trend is also down. A trade through 90.735 will change the minor trend to up. This will shift momentum to the upside. Taking out the nearest minor bottom at 90.235 will indicate the selling pressure is increasing.

The short-term range is 89.165 to 91.605. The index is currently testing its retracement zone at 90.385 to 90.095.

On the upside, the nearest resistance is a 50% level at 90.950.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March U.S. Dollar Index on Monday will be determined by trader reaction to the short-term 50% level at 90.385.

Bearish Scenario

A sustained move under 90.385 will indicate the presence of sellers. The first downside targets are a minor bottom at 90.235, a Fibonacci level at 90.095 and a main bottom at 90.030.

Taking out 90.030 will change the main trend to down. This is also a potential trigger point for an acceleration to the downside. After taking out the main bottom at 89.890, the daily chart indicates the index has a clean shot at 89.165.

Bullish Scenario

A sustained move over 90.385 will signal the presence of buyers. They are trying to defend the uptrend. The first upside target is 90.735. Taking out this level will shift momentum to the upside with 90.950 the next likely upside target price.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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