U.S. Dollar Index (DX) Futures Technical Analysis – Volatile Session Expected with 92.200 Setting the Tone

The U.S. Dollar is trading higher against a basket of major currencies early Monday, but well off its high. The dollar opened higher on safe-haven buying as worries that events in Turkey will cause disruptions in other financial markets.

The Turkish lira slumped toward a record low versus the dollar after President Tayyip Erdogan stunned investors over the weekend by replacing the hawkish central bank governor with a critic of high interest rates.

At 06:43 GMT, June U.S. Dollar Index futures are trading 92.015, up 0.090 or +0.10%.

Erdogan fired the central bank governor only two days after a sharp rate hike that was meant to head off inflation of nearly 16% and support the Lira.

The new central bank governor likely means a reversal of the hawkish and orthodox steps taken to battle inflation, which could lead to prolonged market volatility, analysts said.

Helping to put a lid on the U.S. Dollar was a drop in U.S. Treasury yields. This dampened the dollar’s appeal as an investment.

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, the first two resistance levels come in at 92.200 and 92.510.

On the downside, potential support levels come in at 91.870, 91.620 and 91.350.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the June U.S. Dollar Index will be determined by trader reaction to 92.200.

Bearish Scenario

A sustained move under 92.200 will indicate the presence of sellers. This could trigger a further break into 91.870. If this fails then look for the selling pressure to possibly extend into the next potential target at 91.620.

Bullish Scenario

Overtaking and sustaining a move over 92.200 will signal the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the resistance cluster at 92.510 to 92.530.

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