U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 92.855, Weakens Under 92.605

The U.S. Dollar is trading steady to higher against a basket of major currencies on Monday with the upside pressure being provided by weakness in the Euro and British Pound. The dollar is still garnering some support from Friday’s U.S. jobs data that showed job growth slowed further in August, while the unemployment rate dipped unexpectedly. Meanwhile, Euro traders are shuffling positions ahead of Thursday’s European Central Bank meeting.

At 10:05 GMT, September U.S. Dollar Index futures are trading 92.980, up +0.261 or +0.28%. Trading is extremely light due to the U.S. Labor Day bank holiday so we’re not going to read too much into the price action.

In other news, the British Pound fell from its highest level in almost a year on fears over a no-deal Brexit.

Amid an EU-UK trade negotiations impasse, the chances of a no-deal Brexit have risen sharply as negotiations have been threatened by Britain’s insistence that it have full autonomy over its state aid plans.

U.K. Prime Minister Boris Johnson’s office released comments on Monday that Britain has set a deadline of October 15, and if none of the free-trade deal is agreed, both sides should “accept that and move on.”

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on September 1.

The main trend will change to up on a trade through 93.480. A move through 91.725 will negate the closing price reversal top and signal a resumption of the downtrend.

The major support is the long-term Fibonacci level at 91.760. This level may have contributed to last week’s rally when the index traded down to 91.725 before reversing to the upside.

The minor range is 93.480 to 91.725. Its 50% level is 92.605.

The short-term range is 93.980 to 91.725. Its 50% level is 92.855.

Short-Term Outlook

The short-term direction of the index is likely to be determined by trader reaction to the pair of 50% levels at 92.855 and 92.605.

Look for an upside bias to develop on a sustained move over .92.855, but don’t look for an acceleration to the upside until the buying is strong enough to overcome tops at 93.480, 93.895 and 93.980.

A sustained move under 92.600 will signal the presence of sellers. This could trigger a break into 92.485. If the index is getting ready to move higher then look for buyers to step in on a pullback into this level.