U.S. Dollar Index Futures (DX) Technical Analysis – Breakout Over 97.700 Puts Greenback in Bullish Position

The U.S. Dollar is trading higher against a basket of major currencies on Monday as investors seek shelter in the safe-haven currency due to the rapid spreading of the coronavirus.

The Euro is trading marginally lower as last week’s dovish European Central Bank comments continue to weigh on the single currency. The British Pound is inching higher on low volume. A plunge in crude oil prices is helping to spike the greenback against the Canadian Dollar.

The U.S. Dollar Index’s gains are being limited by rallies in the safe-haven Swiss Franc and Japanese Yen. Plunging Treasury yields are also weighing on the U.S. Dollar.

At 10:39 GMT, March U.S. Dollar Index futures are trading 97.690, up 0.040 or +0.04%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 97.740 will signal a resumption of the uptrend with the November 29 main top at 98.045 the next likely upside target. The main trend will change to down on a move through the last main bottom at 96.815.

The main range is 98.735 to 96.020. Its retracement zone at 97.380 to 97.700 is controlling the near-term direction of the market.

Daily Technical Forecast

Based on the early price action and the current price at 97.690, the direction of the March U.S. Dollar Index the rest of the session on Monday is likely to be determined by trader reaction to the Fibonacci level at 97.700.

Bullish Scenario

A sustained move over 97.700 will indicate the presence of buyers. Taking out 97.740 is likely to trigger an acceleration to the upside. This could lead to a test of the main top at 98.045.

Overcoming 98.045 will reaffirm the uptrend. This could lead to a test of the resistance cluster at 98.105 to 98.145.

Bearish Scenario

A sustained move under 97.700 will signal the presence of sellers. The first downside target is an uptrending Gann angle at 97.565.

Taking out 97.565 will indicate the selling is getting stronger. This could trigger a break into a downtrending Gann angle at 97.470, followed by the main 50% level at 97.380.