James Hyerczyk
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US Dollar Index

The U.S. Dollar is inching lower against a basket of major currencies at the mid-session on Thursday after posting a choppy, two-sided trade with investors showing a mixed reaction to another rise in U.S. consumer inflation data and commentary from the European Central Bank.

At 17:16 GMT, June U.S. Dollar Index futures are trading 90.080, down 0.041 or -0.05%.

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Consumer prices for May accelerated at their fastest pace since the summer of 2008 amid the economic recovery from the pandemic-triggered recession, the Labor Department reported Thursday.

The consumer price index, which represents a basket including food, energy, groceries and prices across a spectrum of goods, rose 5% from a year ago. Economists surveyed by Dow Jones had been expecting a gain of 4.7%.

A separate report released Thursday showed that jobless claims for the week ended June 5 came in at 376,000, versus a Dow Jones estimate of 370,000. The total still marked the lowest of the pandemic era.

The Euro is trading nearly flat after the European Central Bank (ECB) decided to keep interest rates unchanged as market players look for clues on whether the central bank will soon lift its massive pandemic-era stimulus.

Daily June U.S. Dollar Index

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 June 4.

A trade through 90.625 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 89.650.

The minor trend is also up. A trade through 89.830 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 89.515 to 90.625. The index is currently straddling its 50% level at 90.070.

The short-term range is 91.435 to 89.515. Its retracement zone at 90.475 to 90.700 is resistance and a potential trigger point for an acceleration to the upside.


Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index into the close is likely to be determined by trader reaction to the pivot at 90.070.

Bullish Scenario

A sustained move over 90.070 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the short-term resistance at 90.475 to 90.700. The last main top at 90.625 is trading inside this retracement zone, making it a valid upside target.

Bearish Scenario

A sustained move under 90.070 will signal the presence of sellers. The first downside target is the minor bottom at 89.830. Taking out this level will shift momentum to the downside with 89.650 the next target.

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