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

The U.S. Dollar is trading higher against a basket of currencies late Monday after rebounding from earlier weakness. Overnight, the greenback hit a low of 92.395, its lowest level since August 6 but is still up nearly 0.5% for the month.

Traders cited various reasons for the turnaround including month-end position-squaring, light volume ahead of Friday’s U.S. Non-Farm Payrolls report and U.S. economic data.

At 19:48 GMT, September U.S. Dollar Index futures are trading 92.685, up 0.033 or +0.04%.

In economic news, data released earlier in the day showed Euro Zone inflation surged to a 10-year-high this month, with consumer prices in the 19 countries sharing the Euro up by 3%. This helped pressure the U.S. Dollar Index.

In the U.S., the dollar briefly pared some of its losses after the S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas showed U.S. single-family homes prices rose in June from the prior year at the fastest pace on record. In other U.S. news, the Chicago PMI for August came in weaker than expected and the Conference Board’s reading for consumer confidence fell short of expectations.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at 92.395 will signal a resumption of the downtrend.

A move through 93.195 will change the main trend to up. This is not likely, but the index is down seven sessions from the top on August 20, which puts it inside the window of time for a potentially bullish closing price reversal bottom. This won’t change the main trend to up, but it could trigger the start of a 2 to 3 day counter-trend rally.

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

The minor range is 93.750 to 92.395. Its retracement zone at 93.075 to 93.230 is the next upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index into the close on Tuesday is likely to be determined by trader reaction to 92.655.

Bullish Scenario

A sustained move over 92.655 will indicate the presence of buyers. The first upside target is 92.765. Taking out this level could trigger a surge into at least 93.075.

Bearish Scenario

A sustained move under 92.655 will signal the presence of sellers. The first downside target is the short-term Fibonacci level at 92.535. This is followed by the intraday low at 92.395.