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James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is inching higher against a basket of currencies on Tuesday. The dollar is posting gains against the Japanese Yen, Swiss Franc, British Pound, and Canadian Dollar, but losing a little ground to the Euro. Since the Euro is weighted the highest in the index, it is keeping a lid on the greenback.

At 07:40 GMT, March U.S. Dollar Index futures are trading 97.095, up 0.035 or +0.04%.

Optimism over the signing of Phase One of the U.S.-China trade deal on Wednesday is providing some support. Additional support is being provided by the dimming of tensions between the United States and Iran.

Later today at 13:30 GMT, traders will get the opportunity to react to the latest data on U.S. consumer inflation. The CPI is expected to come in at 0.3% and Core CPI at 0.2%.

Daily March U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 97.405 will change the main trend to up. A move through 96.020 will signal a resumption of the downtrend.

A trade through 97.005 will confirm the closing price reversal top formed on January 10. This will shift momentum to the downside.

The main range is 98.735 to 96.020. Its retracement zone at .97.380 to 97.700 is resistance. This zone stopped the rally on December 23 at 97.405.

The short-term range is 98.045 to 96.020. Its retracement zone at 97.035 to 97.270 is currently being tested. It’s currently acting like resistance.

On the downside, the major support zone is 96.700 to 96.220.

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Daily Swing Chart Technical Forecast

Based on the price action the last three days and the current price at 97.095, the direction of the March U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at 97.035.

Bullish Scenario

A sustained move over 97.035 will indicate the presence of buyers. If this generates enough upside momentum then look for a move into a series of levels at 97.270, 97.300, 97.380 and 97.405. The latter is a potential trigger point for an acceleration to the upside with 97.700 the next likely upside target.

Bearish Scenario

A sustained move under 97.035 will signal the presence of sellers. Taking out 97.005 will confirm the closing price reversal top. This could trigger an acceleration to the downside with 96.700 the next major target.

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