U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 90.395 Sets the Tone

The U.S. Dollar is edging lower against a basket of major currencies early Tuesday after posting a reversal to the upside the previous session. Nonetheless, the market remains within striking distance of its 2-1/2-year low reached on December 17.

The catalyst behind the current downside pressure is President Trump’s signing of a $900 billion COVID-19 relief bill into law on Sunday. The total stimulus package is worth $2.3 trillion if you include the government spending portion.

At 07:09 GMT, March U.S. Dollar Index futures are at 90.965, down 0.210 or -0.23%.

Bearish traders are now hoping for another gift after the U.S. House of Representatives voted Monday to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote. It would be an extremely bearish surprise if the Republican-led Senate passed the bill.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 89.640 will signal a resumption of the downtrend after seven days of sideways trading. The main trend will change to up on a trade through 92.730, which is highly unlikely.

The minor trend is also down. The minor trend will change to up on a move through 90.950. This will also shift momentum to the upside.

The minor range is 91.150 to 89.640. Its 50% level at 90.395 is resistance.

The short-term range is 92.730 to 89.640. Its retracement zone at 91.185 to 91.550 is also resistance.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index is being controlled by the pivot at 90.395.

Bearish Scenario

A sustained move under 90.395 will indicate the presence of sellers. This should lead to an eventual test of the minor bottom at 89.640.

Bullish Scenario

A sustained move over 90.395 will signal the return of buyers. This move could create the upside momentum needed to challenge the minor top at 90.950, followed by the resistance cluster at 91.150 to 91.185.

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