U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 92.960, Strengthens Over 93.110

The U.S. Dollar is trading nearly flat against a basket of major currencies on Tuesday but hovering near a five-day low touched earlier in the session. The price action suggests trader indecision over whether the Fed will move forward with tapering plans and the impact of the spread of the delta variant on the global economic recovery.

Relatively low volume ahead of the start of the central bankers’ symposium on August 26 and a speech from Fed Chair Jerome Powell the next day could also be responsible for the lackluster trade.

At 14:39 GMT, September U.S. Dollar Index futures are trading 92.945, down 0.0026 or -0.03%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the confirmation of the August 20 closing price reversal top.

A trade through 93.750 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down if 92.470 is taken out.

The short-term range is 92.470 to 93.750. The index is currently testing its retracement zone at 93.110 to 92.960.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index into the close will be determined by trader reaction to 92.960.

Bearish Scenario

A sustained move under 92.960 will indicate the presence of sellers. If this move is able to generate enough downside momentum over the near-term then we could see an eventual break into the support cluster at 92.495 to 92.470.

Bullish Scenario

A sustained move over 92.960 will signal the presence of buyers. The first upside target is 93.11. Overtaking this level will indicate the buying is getting stronger with 93.325 the first upside target.

Sellers may come in on the first test of 93.325. They are going to try to form a potentially bearish secondary lower top. If buyers can take out this level then look for a retest of 93.750.