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U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 89.975, Strengthens Over 90.215

By:
James Hyerczyk
Updated: Jun 3, 2021, 04:58 UTC

The direction of the June U.S. Dollar Index on Thursday is likely to be determined by trader reaction to the minor pivot at 89.975.

US Dollar Index

The U.S. Dollar is trading flat against a basket of major currencies early Thursday, hovering above a multi-month low while attracting just enough selling to keep a lid on prices as traders awaited a slew of economic data the next two days that could set the tone at the next Federal Reserve meeting later this month.

At 04:34 GMT, June U.S. Dollar Index futures are trading 89.935, up 0.034 or +0.04%.

Investors have bet on the dollar falling as the world recovers from the COVID-19 pandemic, but they have lately grown nervous over whether a surprisingly strong U.S. economic rebound poses a threat to a key assumption that interest rates stay low, according to Reuters.

The mood has kept speculators from adding much to short positions in recent weeks. That has put the brakes on what had a month ago seemed like a relentless downtrend and has pushed trend-following traders into a wait-and-see mode.

In economic news, U.S. private payrolls figures due later on Thursday are the latest numbers to offer clues on the state of the economy and a possible read on broader non-farm payrolls data due on Friday. Appearances by a handful of Federal Reserve officials will also be closely watched for hints of sensitivity to the early strength of the rebound ahead of their next meeting in mid-June.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 90.430 will change the main trend to up. A move through 89.515 will signal a resumption of the downtrend.

The minor trend is up. A trade through 89.650 will change the minor trend to down.

The minor range is 89.515 to 90.430. The index is currently straddling its 50% level at 89.975.

The short-term range is 90.910 to 89.515. Its 50% level at 90.215 is potential resistance.

The intermediate range is 91.435 to 89.515. Its retracement zone at 90.475 to 90.700 is another potential resistance area.

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 the minor pivot at 89.975.

Bearish Scenario

A sustained move under 89.975 will indicate the presence of sellers. The first downside target is the minor bottom at 89.650. Taking out this level could trigger an acceleration into the main bottom at 89.515. If this level fails then look for the selling to possibly extend into the January 6 main bottom at 89.155.

Bullish Scenario

A sustained move over 89.975 will signal the presence of buyers. This could trigger a surge into 90.315. Overtaking this level could trigger a spike into 90.430 to 90.475.

Side Notes

Any rallies are likely to be labored because of numerous potential resistance levels. Buyers are going to have to overcome 90.705 before we can even start thinking about an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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