U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 93.245, Strengthens Over 93.790

The U.S. Dollar is edging lower against a basket of major currencies on Thursday after posting a volatile two-sided trade the previous session. The greenback surged on Tuesday night as President Donald Trump’s running vote total put him in a position to reclaim the presidency after the pre-election polls showed he had no chance at winning.

The dollar gave up all of those earlier gains, however, later in the session and riskier currencies recovered as U.S. election results tightened as Democratic candidate Joe Biden gained ground in the polls.

At 03:26 GMT, December U.S. Dollar Index futures are trading 93.400, down 0.0011 or -0.01%.

We’re likely to see continued volatility over near-term as both candidates are prepared to challenge in court the outcome of the election, which is very close, but leaning toward a Biden victory. Furthermore, there was no so-called “Blue Wave” with the Republicans holding on to control of the Senate. Therefore, it’s not immediately clear how this will affect future fiscal stimulus measures.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the momentum appears to be getting ready to shift to the downside following Wednesday’s closing price reversal top. A trade through 93.245 will confirm the potentially bearish chart pattern.

The main trend will change to down on a move through the nearest main bottom at 92.460, while a trade through 94.330 will reaffirm the uptrend.

The minor trend is down. This indicates a shift in momentum to the downside.

The short-term range is 91.750 to 94.795. Its 50% level or pivot at 93.275 is currently being tested. This is support and a potential trigger point for an acceleration to the downside.

The minor range is 94.330 to 93.245. Its 50% level or pivot at 93.790 is potential resistance and a trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The trade the last two days suggests the direction of the December U.S. Dollar Index on Thursday is likely to be determined by trader reaction to the 50% level at 93.275.

Bullish Scenario

Holding above 93.275 will indicate the presence of buyers. This could create the momentum needed to challenge the pivot at 93.790. Overtaking this level could trigger an acceleration into 94.330 and a breakout over this level could lead to a rally into the resistance cluster at 94.770 to 94.795.

Bearish Scenario

A sustained move under 93.275 will signal the presence of sellers. This could trigger a steep break into the main bottom at 92.460.