U.S. Dollar Index (DX) Futures Technical Analysis – Weakens Under 96.195, Strengthens Over 96.355

The U.S. Dollar is trading nearly flat on Tuesday as low holiday volume continues to dominate the currency markets. A lifeless Treasury market is having little influence on the index, but safe-haven liquidation is helping to drive the Japanese Yen lower against the U.S. Dollar. Safe-haven selling could also be capping the dollar as investors flock to higher-risk assets on the hopes of easing Omicron fears.

At 09:33 GMT, March U.S. Dollar Index futures are trading 96.070, down 0.016 or -0.02%. On Monday, the Invesco DB US Dollar Index Bullish Fund ETF (UUP) settled at $25.75, up $0.02 or +0.08%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on December 15.

A trade through 96.895 will negate the closing price reversal top and signal a resumption of the uptrend. A move through 95.500 will change the main trend to down.

The minor trend is also up. A trade through 95.810 will change the minor trend to down. This will confirm the shift in momentum. A move through the minor top at 96.670 will signal the buying is getting stronger.

The nearest resistance is a pair of 50% levels at 96.200 and 96.355.

The nearest support is a 50% level at 95.360, followed by a short-term retracement zone at 95.050 to 94.610.

Daily Swing Chart Technical Forecast

The direction of the March U.S. Dollar Index on Tuesday is likely to be determined by trader reaction to 96.200.

Bearish Scenario

A sustained move under 96.200 will indicate the presence of sellers. Taking out 95.970 will indicate the selling is getting stronger with 95.810 the next likely target.

Taking out 95.810 will change the minor trend to down. This could trigger an acceleration into the main top at 95.500.

Bullish Scenario

A sustained move over 96.200 will signal the presence of buyers. The first target is 96.355.

Overtaking 96.355 could trigger a quick surge into 96.670. Overcoming this level could fuel a rally into the 96.895 main top.