U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 92.655, Strengthens Over 92.695

The U.S. Dollar is inching higher against a basket of currencies on Thursday following five sessions of losses as longer-term vaccine optimism over COVID-19 vaccines was dampened by worries about rising infections and risks to the fragile global economic recovery.

At 06:56 GMT, December U.S. Dollar Index futures are trading 92.490, up 0.179 or +0.19%.

Surging coronavirus cases in the United States have exerted opposing forces on the dollar, with a safety bid supporting the currency while fresh speculation of monetary easing to boost the economy has undermined it, Reuters reported.

In other news, two top Fed officials on Wednesday held out the option of doing more and Treasuries have rallied in anticipation of a possible expansion of Fed bond buying. While welcome news for the economy, this move should keep the pressure on interest rates and likely make the greenback a less-attractive asset.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 92.120 will reaffirm the downtrend. A move through 93.190 will change the main trend to up.

The minor trend is also down, however, a new minor bottom was formed at 92.195 overnight.

The first minor range is 92.120 to 93.190. Its 50% level at 92.655 is resistance.

The second minor range is 93.190 to 92.195. Its 50% level at 92.695 is also resistance.

Daily Swing Chart Technical Forecast

The direction of the December U.S. Dollar Index on Thursday is likely to be determined by trader reaction to the first pivot at 92.655.

Bearish Scenario

A sustained move under 92.655 will indicate the presence of sellers. This could lead to a retest of the minor bottom at 92.195 and the main bottom at 92.120. If this price fails as support then look for the selling to possibly extend into the September 1 main bottom at 91.750.

Bullish Scenario

A sustained move over 92.655 will indicate the presence of buyers. Overtaking 92.695 will indicate the short-covering is getting stronger. The next major upside target and potential resistance area is a price cluster at 93.190 to 93.225.

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