U.S. Dollar Index Futures (DX) Technical Analysis – Could Strengthen Over 97.605, Weaken Under 97.595

The U.S. Dollar is trading lower against a basket of currencies on Thursday on renewed hopes of a trade deal between the United States and China. The dollar traded higher the previous session on reports that the U.S. and China had hit a snag in negotiations over the rollback of tariffs. Reports also said the trade deal could be delayed until early 2020. Both reports made the dollar an attractive hedge against a stock market sell-off.

At 14:57 GMT, December U.S. Dollar Index futures are trading 97.770, down 0.044 or -0.04%.

The index is being pressured on Thursday because the Euro is trading higher. The single-currency is picking up strength because of the hope of a trade deal after Chinese officials said they were still negotiating with the United States. They also told investors to ignore the “external” rumors. Furthermore, China also invited U.S. negotiators to Beijing to continue the talks.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 98.300 will signal a resumption of the uptrend. The main trend will change to down on a move through 96.960.

The main range is 94.975 to 99.305. Its retracement zone at 97.140 to 96.630 is major support.

The intermediate range is 99.305 to 96.885. Its retracement zone at 98.095 to 98.380 is resistance.

The short-term range is 96.885 to 98.300. Its retracement zone at 97.595 to 97.425 is also support. This zone stopped the selling at 97.550 earlier in the week.

Daily Technical Forecast

Based on the earlier price action and the current price at 97.770, the direction of the December U.S. Dollar Index the rest of the session on Thursday is likely to be determined by trader reaction to the support cluster at 97.605 to 97.595.

Bullish Scenario

A sustained move over 97.605 will indicate the presence of buyers. If this move can create enough upside momentum then look for the rally to possibly extend into the resistance cluster at 98.095 to 98.150.

Bearish Scenario

A sustained move under 97.595 will signal the presence of sellers. The first target is a minor bottom at 97.550. If this fails then look for the selling to possibly extend into the minor Fibonacci level at 97.425.

If 97.425 fails as support then look for the selling to possibly extend into the next uptrending Gann angle at 97.245.