U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 91.100, Strengthens Over 91.555

The U.S. Dollar is trading nearly flat on Thursday, pinned near its lowest level since March 3, reached on Tuesday. The pressure on the greenback is being generated by falling U.S. Treasury yields that are reducing the greenback’s appeal as an investment.

Sentiment toward the dollar has weakened as last month’s spike in Treasury yields reverses course, but some analysts say the outlook over the longer-term remains positive due to a strong U.S. economy and an improved coronavirus vaccination program.

At 06:16 GMT, June U.S. Dollar Index futures are trading 91.095, down 0.034 or -0.04%.

The focus on Thursday shifts to the Euro and the European Central Bank’s (ECB) monetary policy meeting later today. The Euro could surge and the U.S. Dollar Index spike lower if the ECB makes positive comments about the economic outlook or hints of tapering bond purchases.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum may have shifted slightly to the upside with the formation of a closing price reversal bottom on Monday and the subsequent confirmation of the chart pattern during yesterday’s session.

A trade through 90.840 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A trade through 91.425 will change the minor trend to up. This will shift momentum to the upside.

The short-term range is 89.655 to 93.470. The market is currently testing its retracement zone at 91.555 to 91.100.

The main range is 89.155 to 94.590. Its retracement zone at 91.870 to 92.510 is resistance. This zone is 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 the short-term Fibonacci level at 91.100.

Bearish Scenario

A sustained move under 91.100 will indicate the presence of sellers. The first downside target is 90.840, followed by 90.620. Taking out this level could trigger an acceleration to the downside with 89.655 the next likely downside target.

Bullish Scenario

A sustained move over 91.100 will signal the presence of buyers. This could trigger a surge into 92.425, followed by 91.555.

Taking out 91.555 will indicate the buying is getting stronger with 91.810 to 91.870 the next likely target.

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