U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 91.870 Pivot Sets the Tone

The U.S. Dollar is trading higher against a basket of currencies early Tuesday despite a dip in U.S. Treasury yields. With the Japanese Yen trading higher along with the dollar, the price action suggests safe-haven buying. This could be tied to the volatility in the Turkish Lira.

The riskier currencies are all under pressure. They include the Euro, British Pound and Swiss Franc. The commodity-linked currencies – Canadian Dollar is also lower. The New Zealand Dollar is down 1.14%, followed by the Australian Dollar, which is off by 0.76%.

Traders said on Monday, a crisis with the Turkish Lira over the weekend was largely contained, but today’s early price action suggests heightened volatility may have returned.

At 05:42 GMT, June U.S. Dollar Index futures are trading 91.890, up 0.149 or +0.16%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 92.185 will signal a resumption of the uptrend. The main trend will change to down on a move through 91.290.

On the upside, potential resistance levels come in at 91.870, 92.200 and 92.510.

On the downside, potential support levels come in at 91.620 and 91.350.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Tuesday is likely to be determined by trader reaction to the 50% level at 91.870.

Bullish Scenario

A sustained move over 91.870 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into 92.185, followed by 92.200. This is a potential trigger point for an acceleration into the resistance cluster at 92.510 to 92.530.

Bearish Scenario

A sustained move under 91.870 will signal the presence of sellers. The first downside target is 91.620. This is followed by a support cluster at 91.350 to 91.290.

If 91.290 fails then look for the index to complete its correction on a test of 91.095 to 90.755.

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