U.S. Dollar Index Futures (DX) Technical Analysis – 97.035 Potential Trigger Point for Downside Acceleration

The U.S. Dollar is trading flat against a basket of currencies early Wednesday. This follows another tight trading range the previous session. Traders had their hands full on Tuesday, dealing with Wednesday’s signing of the U.S.-China trade deal, the removal of China as a currency manipulator by the United States, a government report on U.S. consumer prices and a Bloomberg report saying the U.S. will review and remove existing tariffs no sooner than 10 months after the deal is signed.

At 04:32 GMT, March U.S. Dollar Index futures are trading 97.095, up 0.001 or +0.00%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 97.405 will change the main trend to up. A move through 96.020 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the upside momentum.

The main range is 98.735 to 96.020. Its retracement zone at 97.380 to 97.700 is resistance. This zone stopped the buying on December 23 at 97.405.

The intermediate range is 98.045 to 96.020. Its retracement zone at 97.035 to 97.270 is also resistance. The market has traded inside this zone since January 9.

The short-term range is 96.020 to 97.305. Its 50% level at 96.665 is a potential downside target.

The major support zone is 96.700 to 96.220. Buyers established a support base inside this zone from December 31 to January 8.

Daily Swing Chart Technical Forecast

Based on the price action this week and the current price at 97.095, the direction of the March U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the intermediate 50% level at 97.035.

Bullish Scenario

A sustained move over 97.035 will indicate the presence of buyers. If they can create enough upside momentum then look for a rally into 97.270 to 97.305. This is followed by 97.380 to 97.405. The latter is the trigger point for an acceleration to the upside with 97.700 the next likely target.

Bearish Scenario

A sustained move under 97.035 will signal the presence of sellers. This is a potential trigger point for an acceleration into the major 50% level at 96.700, followed by the short-term 50% level at 96.665.