U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 93.745 – 93.560 Sets Near-Term Tone

The U.S. Dollar is trading higher against a basket of major currencies late in the session on Tuesday. The index is being underpinned by higher Treasury yields, but low volume ahead of Friday’s U.S. Non-Farm Payrolls report is helping to cap gains.

At 18:04 GMT, December U.S. Dollar Index futures are trading 93.920, up 0.140 or +0.15%.

The greenback is edging back toward a one-year high versus major peers after a three day setback. Traders are preparing for a key payrolls report at the end of the week that could boost the case for the Federal Reserve to start tapering stimulus as soon as next month.

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 a closing price reversal top on September 30.

A trade through 94.520 will negate the closing price reversal top and signal a resumption of the uptrend.

A move through 93.680 will indicate the selling pressure is getting stronger. A trade through 92.970 will change the main trend to down.

The minor range is 94.520 to 93.680. Its 50% level or pivot at 94.100 is resistance.

The short-term range is 92.970 to 94.520. Its retracement zone at 93.745 to 93.560 is support. This zone stopped the selling at 93.680 on Monday.

The main range is 91.935 to 94.520. Its retracement zone at 93.230 to 92.922 is the primary downside target and value zone.

Daily Swing Chart Technical Forecast

The direction of the December U.S. Dollar Index into the close on Tuesday is likely to be determined by trader reaction to 94.100.

Bearish Scenario

A sustained move under 94.100 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into a support cluster at 93.745, 93.680 and 93.560.

Bullish Scenario

Overtaking 94.100 late in the session on Monday will signal the presence of buyers. This could trigger an acceleration to the upside with potential targets coming in at 94.520 to 94.570.