U.S. Dollar Index (DX) Futures Technical Analysis – Testing Major Retracement Zone at 91.870 to 92.510

The U.S. Dollar is trading flat against a basket of its peers early Wednesday after producing its fifth straight lower-low since March 31. The catalysts behind the selling is profit-taking after a strong first quarter and a drop in Treasury yields from recent peaks.

With the dollar and yields moving lower at the same time, while U.S. stock markets hover near record highs, the price action suggests the greenback is losing its luster as a safe-haven investment.

At 04:07 GMT, June U.S. Dollar Index futures are trading 92.350, up 0.002 or +0.00%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on March 31.

A trade through 93.470 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 91.290.

The minor trend is down. This is controlling the momentum. A trade through 93.130 will change the minor trend to up, while shifting momentum back to the upside.

The contract range is 94.589 to 89.155.  The index is currently trading inside its retracement zone at 92.510 to 91.870. The area is controlling the near-term direction of the index.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.550 to 91.100 is the primary downside target. Since the main trend is up, buyers are likely to come in on the first test of this zone.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the Fibonacci level at 92.510.

Bearish Scenario

A sustained move under 92.510 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for the selling to possibly extend into the main 50% level at 91.870. Look for a technical bounce on the first test of this level. If it fails to hold, then look for the selling to possibly extend into 91.550 to 91.100.

Bullish Scenario

A sustained move over 92.510 will single the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into a minor pivot at 92.860, followed by the minor top at 91.130.

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