U.S. Dollar Index Futures (DX) Technical Analysis – June 4, 2019 Forecast

The U.S. Dollar is trading higher against a basket of major currencies after testing its lowest level since May 13 earlier in the session. The intraday reversal to the upside is being primarily fueled by Euro weakness. Rising U.S. Treasury yields and increased demand for riskier assets is also helping to underpin the U.S. Dollar.

At 13:58 GMT, June U.S. Dollar Index futures are trading 97.200, up 0.140 or +0.14%.

The Euro is under pressure because of weaker-than-expected Euro Zone inflation. Increased demand for risk is helping to weaken the safe-haven Japanese Yen and Swiss Franc. Helping to limit the Dollar Index’s gains are a stronger British Pound and Canadian.

Traders will be watching comments from Federal Reserve Chairman Jerome Powell for any references to monetary policy and the direction of interest rates.

Just a short while ago, Powell said, “We do not know how or when these issues will be resolved,” he said in prepared remarks. “We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective.”

The remarks may have been perceived as hawkish by investors because the index hit a new high for the day shortly thereafter.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top at 98.26 on May 23. A trade though this level will negate the reversal top and signal a resumption of the uptrend.

The main trend will change to down on a move through the last swing bottom at 96.810.

The short-term range is 96.810 to 98.260. Its retracement zone at 97.364 to 97.535 is resistance.

The retracement zone support and primary downside target comes in at 96.720 to 96.355.

Daily Technical Forecast

Based on the early price action, the direction of the June U.S. Dollar Index futures contract on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at 97.260.

Bearish Scenario

A sustained move under 97.260 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into a long-term uptrending Gann angle at 96.830. This is followed by the main bottom at 96.810 and the 50% level at 96.720.

Bullish Scenario

Overtaking and sustaining a rally over 97.260 will signal the presence of buyers. This could lead to a test of 97.310 and 97.365.

The short-term Fibonacci level at 97.365 is the trigger point for an acceleration to the upside with the next target the short-term 50% level at 97.535. We could see another surge on a move through this level with a short-term Gann angle at 97.760 the next target.