U.S. Dollar Index (DX) Futures Technical Analysis – Upside Momentum Could Extend Rally into 93.195 to 93.430

The U.S. Dollar is trading higher against a basket of major currencies at the mid-session on Monday. Despite the small gain, the trade has been choppy as traders assessed how rising COVID-19 cases in the United States might affect the outlook for the economy.

Helping to underpin the U.S. Dollar was Friday’s robust Non-Farm Payrolls report. The news drove Treasury yields higher as investors increased bets on an earlier than expected tapering by the Federal Reserve.

At 16:19 GMT, September U.S. Dollar Index futures are trading 92.890, up 0.090 or +0.10%.

In other supportive news, data Monday showed U.S. job openings jumped to a fresh record high in June and hiring increased. That came on the heels of Friday’s U.S. monthly jobs report that showed U.S. employers hired the most workers in nearly a year in July and continued to raise wages.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 93.195 will reaffirm the uptrend. A move through 91.780 will change the main trend to down.

On the downside, the nearest potential support is a long-term Fibonacci level at 92.495. After a steep drop-off, additional support comes in at 91.950 to 91.850, followed by the main top at 91.780.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index is likely to be determined by trader reaction to 92.800.

Bullish Scenario

A sustained move over 92.800 will indicate the presence of buyers. Taking out the intraday high at 92.965 will indicate the buying is getting stronger. If the move triggers an acceleration to the upside, then look for the rally to possibly extend into the main top at 93.195, followed by the March 31 main top is 93.430.

Bearish Scenario

A sustained move under 92.800 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the long-term Fibonacci level at 92.495.

Side Notes

A close under 92.800 will form a potentially bearish closing price reversal top. If confirmed then look for the start of a possible 2 to 3 day correction.