U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 90.485 Sets the Tone
The U.S. Dollar is trading flat early Monday but attracting some safe-haven buying at the start of a new week with traders expressing some concerns amid the volatility on Wall Street. Traders may be bracing for a continuation of the battle between aggressive speculative retail traders and several hedge funds specializing in the short-sales of stocks that could influence investor sentiment.
At 03:23 GMT, March U.S. Dollar Index futures are trading 90.555, down 0.014 or -0.02%.
On the data front, the key report that could drive the price action later in the session is the ISM Manufacturing PMI report at 15:00 GMT. It is expected to come in at 60.0, slightly below the previously reported 60.7.
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 January 19.
A trade through 90.940 will signal a resumption of the uptrend. The main trend will change to down on a move through 90.030.
The minor range is 90.940 to 90.030. The index has been straddling its pivot at 90.485 the last three sessions.
The short-term range is 89.165 to 90.940. Its retracement zone at 90.055 to 89.845 is potential support.
The main range is 92.730 to 89.165. Its retracement zone at 90.950 to 91.370 is resistance. The upper level at 91.370 is also a potential trigger point for an acceleration to the upside.
Daily Swing Chart Technical Forecast
Based on the early trade, the direction of the March U.S. Dollar Index on Monday is likely to be determined by trader reaction to 90.485.
A sustained move over 90.485 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to extend into 90.880 to 90.948.
Taking out 90.948 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next potential target 91.370.
A sustained move under 90.485 will signal the presence of sellers. If this generates enough downside momentum then look for a possible test of 90.055 to 89.845. The latter is a potential trigger point for an acceleration into 89.165.