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U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 91.950, Weakens Under 91.850

By:
James Hyerczyk
Published: Jun 29, 2021, 21:03 UTC

The near-term direction of the September U.S. Dollar Index is likely to be determined by trader reaction to 91.950 and 91.850.

US Dollar Index

The U.S. Dollar rose against a basket of major currencies on Tuesday, posting its largest single daily gain in roughly two weeks, as new coronavirus outbreaks threatened to derail the global economic recovery. Fears over the spread of the highly infectious Delta variant of the virus are denting sentiment at a time markets are on edge after the Federal Reserve shocked traders with a hawkish tilt earlier in the month. A decline in risk appetite benefits the U.S. Dollar as a safe haven.

At 20:30 GMT, September U.S. Dollar Index futures are trading 92.060, up 0.184 or +0.20%.

The U.S. Dollar also got a boost after data showed U.S. consumer confidence increased in June to its highest level since the COVID-19 pandemic started more than a year ago. That lifted expectations for strong economic growth in the second quarter.

Investors are also looking to Friday’s U.S. Non-Farm Payrolls, with a new jobs forecast of 690,000 in June compared with 559,000 in May, according to a Reuters poll of economists.

“Stepped-up dollar buying is a sign of investor confidence that America’s June jobs report could be one of the year’s strongest,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 92.395 will signal a resumption of the uptrend. A move through 91.505 will change the main trend to down.

The main range is 94.570 to 89.130. The index is currently testing its retracement zone at 91.850 to 92.495. This zone is controlling the longer-term direction of the index.

The intermediate range is 93.430 to 89.545. The index is currently trading on the strong side of its retracement zone at 91.490 to 91.950, making it potential support.

The short-term range is 89.545 to 92.395. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at 90.970 to 90.635.

Short-Term Outlook

The near-term direction of the September U.S. Dollar Index is likely to be determined by trader reaction to 91.950 and 91.850.

Bullish Scenario

A sustained move over 91.950 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the main top at 92.395, followed by the main Fibonacci level at 92.495.

Bearish Scenario

A sustained move under 91.850 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the main bottom at 91.505, followed by the main 50% level at 91.490. Taking out this level could trigger an acceleration to the downside.

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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