U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 91.370 Sets Tone into Close

The U.S. Dollar is trading higher on Thursday but backing off its high following the release of mixed U.S. economic data. Perhaps limiting gains is profit-taking ahead of Friday’s U.S. Non-Farm Payrolls report.

Technically, the index is up 10 sessions from is last main bottom, which puts it inside the window of time for a potentially bearish closing price reversal top. This chart pattern won’t change the main trend to down, but it could trigger the start of a 2 to 3 day counter-trend break.

At 14:33 GMT, March U.S. Dollar index futures are trading 91.360, up 0.212 or +0.23%.

In economic news, the number of Americans filing new applications for unemployment benefits decreased last week, suggesting that the labor market was stabilizing as authorities started to loosen pandemic-related restrictions on businesses.

Meanwhile, U.S. worker productively fell at its steepest pace since 1981 in the fourth quarter, but the trend remains solid as the COVID-19 pandemic weighs heavily on the less productive industries like leisure and hospitality.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 91.490 will signal a resumption of the uptrend. The main trend will change to down on a move through 90.030.

The market is currently straddling a Fibonacci level at 91.370.

On the downside, support is a pair of 50% levels at 91.165 and 90.950.

On the upside, resistance is a price cluster at 91.640 to 91.710.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March U.S. Dollar Index into the close will be determined by trader reaction to 91.370.

Bullish Scenario

A sustained move over 91.370 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 91.640 to 91.710.

Bearish Scenario

A sustained move under 91.370 will signal the presence of sellers. This could lead to a labored break with potential targets 91.165 and 90.950.

Side Notes

A close under 91.150 will form a closing price reversal top. If confirmed, then look for the start of a 2 to 3 day correction.

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