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U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 99.250, Weakens Under 98.130

By:
James Hyerczyk
Published: Mar 29, 2020, 01:40 UTC

Trader reaction to the retracement zone at 99.245 to 93.130 will determine the near-term direction of the June U.S. Dollar Index over the near-term.

U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 99.250, Weakens Under 98.130

The U.S. Dollar fell against a basket of major currencies on Friday, helping to contribute to its biggest weekly decline in four years, as trillions of dollar’s worth of stimulus efforts by governments and central banks during the coronavirus epidemic helped temper a rout in global markets. What this basically means is the U.S. Federal Reserve took action earlier in the week that guaranteed enough U.S. Dollars would be around to soften a credit crunch. Too much supply, lower demand weighed on the greenback.

On Friday, June U.S. Dollar Index futures settled at 98.537, down 0.916 or -0.92%.

The U.S. Dollar lost 0.99% against the Euro, 2.31% versus the British Pound, 1.47% against the Japanese Yen, 0.14% versus the Canadian Dollar and 1.30% against the Swiss Franc.

Daily June U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 103.960 will signal a resumption of the uptrend. The main trend will change to down on a move through the last main bottom at 94.530.

The short-term range is 94.530 to 103.960. Its retracement zone at 99.245 to 98.130 was the first downside target. The index closed inside this zone on Friday.

The major upside target and retracement zone is 101.495 to 108.145. This zone stopped the rally last week at 103.960. Needless to say, this zone is controlling the longer-term direction of the index.

Short-Term Outlook

Trader reaction to the retracement zone at 99.245 to 93.130 will determine the near-term direction of the June U.S. Dollar Index over the near-term.

A sustained move over 99.245 will indicate the return of buyers. This could lead to a quick rebound rally with the major 50% level at 101.495 the next likely upside target.

A sustained move under 98.130 will indicate the selling is getting stronger. This could trigger an acceleration to the downside since the next major target is the March 9 main bottom at 94.530.

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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