U.S. Dollar Index (DX) Futures Technical Analysis – Trading on Weak Side of 91.870 – 92.510 Retracement Zone

The U.S. Dollar is inching higher against a basket of major currencies on Thursday as investors square positions ahead of today’s weekly initial claims and monthly retail sales reports at 12:30 GMT. Earlier in the session, the index hit a three-week low as U.S. bond yields retreated from recently reached multi-month highs.

At 11:31 GMT, June U.S. Dollar Index futures are trading 91.700, up 0.026 or +0.03%.

U.S. Treasury yields are trending lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

There may not be much of a reaction to the news unless the reports come in weaker than expected because investors seem to be buying into the Federal Reserve’s arguments that interest rates can stay low even if the economy continues to strengthen.

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 March 31. The main trend will change to down on a move through 91.290. A move through 93.470 will signal a resumption of the uptrend.

The minor trend is down. This confirms the shift in momentum. A trade through 92.365 changes the minor trend to up.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.555 to 91.100 is potential support. Inside this zone is the last main bottom at 91.290. Earlier today, buyers came in at 91.495, following a test of this area.

The main range is 94.587 to 89.155. The index is currently trading on the weak side of its retracement zone at 91.870 to 92.510. This zone is potential resistance. It’s also controlling the near-term direction of the index.

Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 91.555.

Bearish Scenario

A sustained move under 91.555 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at 91.290, followed by the short-term Fibonacci level at 91.100. This is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 91.555 will signal the presence of sellers. The first upside target is the main 50% level at 91.870. This is a potential trigger point for an acceleration to the upside with 92.365 to 92.510 the next two targets.