U.S. Dollar Index Futures (DX) Technical Analysis – Found Early Support on 50% Level of Major Retracement Level at 96.405

The U.S. Dollar is recovering against a basket of currencies on Monday after testing a major technical level and as aggressive counter-trend buyers came in ahead of the last main bottom at 96.295.

On Friday, the greenback weakened across the board as optimism about the outlook for a U.S.-China trade deal lifted investors’ appetite for risky currencies. The dollar also lost ground as hedgers shed positions placed as protection against an escalation of the trade war between the United States and China. Since the two economic powerhouses agreed to a “Phase One” deal at mid-month, trade tensions have eased, dampening the dollar’s appeal as a safe-haven asset.

At 09:49 GMT, March U.S. Dollar Index futures are trading 96.510, down 0.036 or -0.04%.

On Monday, the U.S. Dollar is losing ground to the Euro, British Pound, Canadian Dollar and the safe-haven Swiss Franc and Japanese Yen.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend resumed when sellers took out the previous day’s low. A trade through the main bottom at 96.295 will reaffirm the downtrend.

The main trend will change to up on a trade through 97.405.

The major support zone, controlling the longer-term direction of the March U.S. Dollar Index is 96.405 to 95.925. Earlier today, aggressive counter-trend buyers came in to support the index when it tested the upper or 50% level.

Daily Technical Forecast

Based on the early price action, 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 uptrending Gann angle at 96.450 and the main 50% level at 96.405.

Bullish Scenario

A sustained move over 96.450 will indicate the presence of counter-trend buyers. The first upside target is another uptrending Gann angle at 96.610. Overtaking this angle could generate enough upside momentum to challenge the downtrending Gann angle at 96.795.

Bearish Scenario

A sustained move under 96.405 will indicate the selling pressure is getting stronger. The first downside target is the main bottom at 96.295.

Look for a potential acceleration to the downside if 96.295 fails as support. The next major target is the main Fibonacci level at 95.925.