U.S. Dollar Index (DX) Futures Technical Analysis – Trying to Build Support Base at 99.245 – 98.130

The U.S. Dollar is trading slightly higher against a basket of major currencies early Wednesday after posting a small gain the previous session. On Tuesday, the greenback rose against the Euro and Swiss Franc to ensure there was enough liquidity in the global financial system.

The dollar benefited from quarterly and fiscal year-end demand from portfolio managers and Japanese firms, but trading was choppy, with the dollar alternating between gains and losses.

For the quarter, the dollar was the biggest gainer, rising 2.8%.

At 04:19 GMT, June U.S. Dollar Index futures are trading 99.175, up 0.083 or +0.08%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 103.960 will signal a resumption of the uptrend. A move through 94.530 will change the main trend to down.

The short-term range is 94.530 to 103.960. Its retracement zone at 99.245 to 98.130 is the primary downside target. The index has been trying to build a support base inside this zone for four straight sessions.

Short-Term Outlook

The near-term direction of the June U.S. Dollar Index is likely to be determined by trader reaction to the retracement zone at 99.245 to 98.130. This zone is controlling the market at this time.

On Wednesday, the direction is likely to be determined by trader reaction to the 50% level at 99.245. Regaining this level could trigger a quick move into the downtrending Gann angle at 100.460. This angle is a potential trigger point for an acceleration to the upside with the next target the long-term 50% level at 101.495.

If sellers come in to defend the 50% level at 99.245 then look for a quick pullback into an uptrending Gann angle at 98.780, If this fails then the selling is likely to extend into the main Fibonacci level at 98.132. This is the trigger point for an even steep decline.