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U.S. Dollar Index (DX) Futures Technical Analysis – Sustained Move Under 90.435 Targets 89.955 Main Bottom

By:
James Hyerczyk
Published: May 17, 2021, 12:27 UTC

The early price action suggests the direction of the June U.S. Dollar Index on Monday is likely to be determined by trader reaction to 90.435.

US Dollar Index

The U.S. Dollar is edging lower against a basket of currencies on Monday, basically mirroring the price action in U.S. Treasury yields. Earlier in the session, the greenback traded higher as new COVID-19 restrictions in Asia and mixed economic data in China encouraged investors to stick with safer currencies.

At 12:10 GMT, June U.S. Dollar Index futures are trading 90.220, down 0.098 or -0.11%.

While investor nervousness supported the U.S. Dollar on Monday, analysts generally expect the greenback to weaken as investors bet on a further rebound in other economies as they reopen.

Later today, investors will get the opportunity to react to the latest Empire State Manufacturing Index and NAHB Housing Market Index report, but the major event is the Fed Minutes on Wednesday.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 89.955 will signal a resumption of the downtrend. The main trend will change to up on a move through 90.910.

The minor range is 89.955 to 90.910. The index is currently trading on the weak side of its pivot at 90.435, making it resistance.

The short-term range is 91.435 to 89.955. Its retracement zone at 90.695 to 90.870 is resistance. This zone stopped the buying at 90.910 last week.

The main resistance is the retracement zone at 91.115 to 91.565. This zone is controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the June U.S. Dollar Index on Monday is likely to be determined by trader reaction to 90.435.

Bearish Scenario

A sustained move under 90.435 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at 89.955. If this fails then look for the selling to possibly extend into the February 25 main bottom at 89.655.

Bullish Scenario

A sustained move over 90.435 will signal the presence of buyers. This could create a labored rally with potential upside targets lined up at 90.695, 90.870 and 90.910.

For a look at all of today’s economic events, check out our economic calendar.

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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