U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 93.770, Weakens Under 93.580

The U.S. Dollar fell against a basket of major currencies on Thursday, putting the greenback in a position to post its first weekly decline in five weeks, dropping from a one-year high as traders turned their attention to when the U.S. Federal Reserve will start raising interest rates.

On Thursday, December U.S. Dollar Index futures settled at 93.961, down 0.119 or -0.13%.

Improved market sentiment, which has lifted global stocks, commodity prices and bond yields, also weighed on the safe-haven dollar.

The greenback had rallied since early September on expectations the U.S. central bank would tighten monetary policy more quickly than previously expected amid an improving economy and surging energy prices.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the momentum is trending lower.

A trade through 93.680 will change the main trend to down. A move through 94.570 will reaffirm the uptrend.

The minor trend is down. It turned down on Thursday when sellers took out 93.925. This move shifted momentum to the downside.

The short-term range is 92.970 to 94.570. Its retracement zone at 93.770 to 93.580 is the primary downside target. Since the main trend is up, buyers could come in on the first test of this area.

The main range is 93.935 to 94.570. If the main trend changes to down then its retracement zone at 93.255 to 93.940 will become the next major target.

The minor range is 93.680 to 94.570. Its 50% level or pivot at 94.125 is the nearest resistance.

Daily Swing Chart Technical Forecast

The direction of the December U.S. Dollar Index early Friday is likely to be determined by trader reaction to 93.770.

Bullish Scenario

A sustained move over 93.770 will indicate the presence of buyers. If this move creates enough upside momentum then look for a drive into the pivot at 94.125.

Overtaking 94.125 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with 94.570 the primary objective.

Bearish Scenario

A sustained move under 93.770 will signal the presence of sellers. This could trigger a quick break into 93.680. Taking out this level will change the main trend to down with 93.580 the primary target.

Taking out 93.580 will indicate the selling pressure is getting stronger. This could trigger an acceleration into the retracement zone at 93.255 to 92.940.

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