U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 96.235, Weakens Under 93.230

The U.S. Dollar is edging higher against a basket of major currencies on Friday as traders prepared for U.S. inflation figures scheduled later in the day that could cement the course of interest rate hikes next year.

The dollar index is headed for its seventh consecutive weekly rise ahead of the data, which is due at 13:30 GMT. If U.S. inflation hits Reuters poll expectations of 6.8% then it would be the highest since 1982, and any upside surprise will be interpreted as a case for a faster Fed taper and rate hikes.

At 12:50 GMT, December U.S. Dollar Index futures are trading 96.360, up 0.108 or +0.11%. On Thursday, the Invesco DB US Dollar Index Bullish Fund (UUP) ETF settled at $25.79, up $0.09 or +0.35%.

U.S. consumer confidence data is also due on Friday, and if it holds up could portend more price pressures ahead.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 96.940 will signal a resumption of the uptrend. A move through 93.865 will change the main trend to down.

The minor trend is also up. A trade through 95.525 will change the minor trend to down. This will also shift momentum. A move through 96.655 will indicate the buying is getting stronger.

The minor range is 95.525 to 96.940. The index is currently trading on the strong side of its pivot at 96.235, making it support.

On the upside, the first target is a major long-term 50% level at 96.500. This is a potential trigger point for an acceleration to the upside.

On the downside, the first support is a minor pivot at 95.955. This is a potential trigger point for an acceleration into 95.405, followed by the short-term retracement zone at 95.105 to 94.670.

Daily Swing Chart Technical Forecast

The direction of the December U.S. Dollar Index on Friday is likely to be determined by trader reaction to 96.235.

Bullish Scenario

A sustained move over 96.235 will indicate the presence of buyers. The first upside target is 96.500, followed by 96.590 and 96.655.

The high at 96.655 is a potential trigger point for an acceleration into 96.940. This is also a trigger point for an acceleration with 97.120 the next like target.

Bearish Scenario

A sustained move under 96.230 will signal the presence of sellers. The first target is 95.955, followed by 95.840.

Taking out 95.840 could trigger an acceleration into 95.540, followed by 95.525 and 94.405.