U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 90.810, Weakens Under 90.460

The U.S. Dollar is inching higher against a basket of currencies early Monday after it posted its worst week in a month on Friday while the Euro gained, as investors bet the U.S. currency has further to fall and that the worst of the COVID-19 pandemic may be over within months.

At 04:48 GMT, December U.S. Dollar Index futures are trading 90.730, up 0.036 or +0.04%.

A flurry of positive vaccine news has helped drive a rally in riskier currencies, while actions taken by the Federal Reserve have weakened the dollar. The sell-off is not being fueled only by long liquidation either. Investors have turned short dollars, figuring rates will stay low for a long time in the United States, forcing yield-seekers to head elsewhere for better returns.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 90.470 will signal a resumption of the downtrend. The main trend will change to up on a move through 93.190. This is highly unlikely, but there is room for a normal counter-trend retracement.

The minor trend is also down. A trade through 92.040 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is 92.040 to 90.470. Its 50% level at 91.255 is the first upside target and resistance.

Daily Swing Chart Technical Forecast

Last week’s low at 90.470 came in just above the July 8, 2018 main bottom at 90.460. This price is a potential trigger point for an acceleration to the downside with the next major target the July 7, 2018 main bottom at 89.790.

Holding above 90.460 will indicate the presence of buyers. Regaining the former bottom at 90.806 will indicate the buying is getting stronger. If this move can create enough upside momentum then look for the rally to possibly extend into the minor 50% level at 91.255.

Since the main trend is down, sellers are likely to come in on the first test of 91.255. Overtaking it could trigger another acceleration to the upside with the next target a major Fibonacci level at 91.815.