U.S. Dollar Index Futures (DX) Technical Analysis – Testing Important Short-Term Retracement Zone at 97.535 to 97.365

Based on Friday’s close at 97.477, the direction of the June U.S. Dollar Index over the short-term is likely to be determined by trader reaction to the Fibonacci level at 97.365.
James Hyerczyk
U.S. Dollar

The U.S. Dollar finished lower against a basket of currencies on Friday. Traders continued to respond to lower Treasury yields and the outlook for a slowing U.S. economy that could lead to a Fed rate cut later in the year.

The catalyst behind the selling pressure was the release of weaker-than-expected U.S. manufacturing PMI data, which indicated the U.S.-China trade dispute was finally having an impact on the U.S. economy.

On Friday, the June U.S. Dollar Index settled at 97.477, down 0.246 or -0.25%.

Daily June U.S. Dollar Index

Daily Swing Chart 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 98.260 on May 23 and the subsequent confirmation of the potentially bearish chart pattern on May 24.

Usually this chart pattern triggers a 2 to 3 day correction of 50% to 61.8% of the last upswing. Currently, the index is trading inside this target zone, which indicates strong downside momentum.

A trade through 98.260 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through 96.81.

The short-term range is 96.810 to 98.260. The market is currently testing its retracement zone at 97.535 to 97.365. This zone is critical to the chart pattern. Since the main trend is up, buyers could show up on a test of this zone. They are going to try to form a secondary higher bottom. Look for further downside pressure if 97.364 fails as support.

The main range is 95.170 to 98.260. If the first retracement zone fails as support then look for the selling to possibly extend into the main retracement zone at 97.715 to 96.350.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 97.477, the direction of the June U.S. Dollar Index over the short-term is likely to be determined by trader reaction to the Fibonacci level at 97.365.

Bearish Scenario

A sustained move under 97.365 will indicate the presence of sellers. This could trigger an acceleration to the downside since the next major target is the main bottom at 96.810.

Bullish Scenario

Holding above 97.365 will signal the presence of buyers. If this move creates enough upside momentum to take out the 50% level at 97.535 then look for the rally to possibly extend into the 50% level or pivot at 97.840.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.