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James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is trading lower against a basket of major currencies early Thursday as mixed signals on a trade deal between the United States and China continue to confuse investors. Not confusing traders is this week’s disappointing U.S. economic data. Sellers have been hitting the dollar this week in response to weaker than expected ISM US Manufacturing PMI data, ISM US Non-Manufacturing PMI data and ADP Non-Farm Employment Change reports.

At 05:46 GMT, December U.S. Dollar Index futures are trading 97.530, down 0.072 or -0.07%.

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Later today, investors will get the opportunity to react to the Challenger Job Cuts report, the U.S. Trade Balance report, Weekly Unemployment Claims and Factory Orders.

Daily December U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Wednesday when sellers took out the last swing bottom at 97.550. The nearest main top is 98.495. A trade through this top will change the main trend to up.

The main 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 98.495. The index is currently straddling its retracement zone at 97.690 to 97.500.

The long-term support zone is 97.140 to 96.630.

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Daily Swing Chart Technical Forecast

Based on this week’s price action and the current price at 97.520, 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 short-term Fibonacci level at 97.500.

Bearish Scenario

A sustained move under 97.500 will indicate the presence of sellers. A trade through yesterday’s low at 97.355 could trigger an acceleration to the downside with the next target the major 50% level at 97.140.

Bullish Scenario

A sustained move over 97.690 will signal the presence of buyers. This could trigger a retest of the 50% level at 97.690. Since the main trend is down, sellers are likely to come in on a test of this level. Overcoming this level could trigger an acceleration to the upside.

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