U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 90.870, Weakens Under 90.695

The U.S. Dollar is holding on to its gains against a basket of major currencies on Thursday, following through to the upside following after a surprisingly large rise in U.S. consumer prices fanned inflation fears.

Data released Wednesday showed that U.S. consumer prices increased by the most in nearly 12 years in April, sparking a “risk-off” move in global markets:  equities and riskier currencies fell while U.S. Treasury yields rose.

At 09:41 GMT, June U.S. Dollar Index futures are trading 90.795, up 0.109 or +0.12%.

Traders are now turning their attention to the U.S. weekly unemployment claims report due at 12:30 GMT and retail sales numbers on Friday for guidance on whether upward pressure on prices will persist.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 91.435 will change the main trend to up. A move through 89.955 will signal a resumption of the downtrend.

The minor range is 91.435 to 89.955. The index is currently testing its retracement zone at 90.695 to 90.870.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.110 to 91.565 is the next potential upside target.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 90.690 and 90.870.

Bullish Scenario

A sustained move over 90.870 will indicate the presence of buyers. This could create the upside momentum needed to challenge the Fibonacci level at 91.111.

Overtaking 91.111 will indicate the buying is getting stronger. This could trigger a surge into the main bottom at 91.435, followed by 91.565.

Bearish Scenario

A sustained move under 90.695 will signal the presence of sellers. The first downside target is a minor pivot at 90.435. If this fails as support then look for the selling to possibly extend into 89.955.