U.S. Dollar Index Futures (DX) Technical Analysis – May 30, 2019 Forecast

The U.S. Dollar is trading flat-to-lower early Thursday versus a basket of currencies. Rising Treasury yields are providing some support, but a slight rise in equity indexes is helping to reduce the greenback’s appeal as a safe-haven asset.

The dollar is trading firmer against the safe-haven Japanese Yen and Swiss Franc, but losing ground against the Euro, British Pound and Canadian Dollar.

We could be looking at position-squaring ahead of today’s release of the U.S. Gross Domestic Product report at 12:30 GMT. The preliminary GDP report is expected to show the economy grew by 3.1%, down slightly from 3.2%. Although it is a preliminary report, it could be the source of volatility because of growing concerns that the escalating trade war between the United States and China could eventually drive the U.S. economy into a recession.

Other reports on Thursday include the Goods Trade Balance, Preliminary Wholesale Inventories, Weekly Unemployment Claims and Pending Home Sales.

At 05:33 GMT, June U.S. Dollar Index futures are trading 98.030, down 0.005 or -0.01%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the formation of the closing price reversal top at 98.260 on May 23.

A trade through 98.260 will negate the closing price reversal top. This will also signal a resumption of the uptrend. The main trend will change to down on a trade through 96.810.

The minor trend is down. This confirms the downside momentum. A trade through 98.260 will change the minor trend to up. A trade through 97.410 will reaffirm the downtrend.

The minor range is 98.260 to 97.410. Its 50% level or pivot at 97.835 is controlling the short-term direction and providing support.

The short-term range is 96.810 to 98.260. Its retracement zone at 97.535 to 97.364 is support. This zone stopped the selling on May 24 at 97.410.

Daily Technical Forecast

Based on yesterday’s move and the early price action, the direction of the June U.S. Dollar Index on Thursday is likely to be determined by trader reaction to the downtrending Gann angle at 98.105.

Bullish Scenario

Taking out 98.105 and sustaining the move will indicate the presence of buyers. This could drive the index into the next downtrending Gann angle at 98.180. This is the last potential resistance angle before the 98.260 main top.

Taking out 98.260 will signal a resumption of the uptrend. If this creates enough upside momentum then look for the rally to possibly extend into the uptrending Gann angle at 98.435. Crossing to the strong side of this angle will put the index in a bullish position.

Bearish Scenario

A sustained move under 98.105 will signal the presence of sellers. The first target is another downtrending Gann angle at 97.950. The selling pressure is likely to increase under 97.950 with the next target the pivot at 97.835.

Look for a potential acceleration to the downside if 97.835 fails with the next target angle coming in at 97.625.