U.S. Dollar Index Futures (DX) Technical Analysis – Testing Major Retracement Zone at 97.140 to 96.629

The U.S. Dollar is trading weaker against a basket of currencies late Friday after data showed a mixed view on the economy, and as optimism that the United States and China will reach a deal to end their trade war reduced safe-haven demand for the greenback.

The dollar initially jumped after U.S. jobs growth slowed less than expected in October, while wages gained and hiring in the prior two months was stronger than previously estimated.

The greenback gave back the early gains after the ISM Manufacturing PMI showed the sector contracted for the third consecutive month in October.

At 18:55 GMT, December U.S. Dollar Index futures are trading 97.060, down 0.094 or -0.10%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 96.885 will reaffirm the downtrend. A move through 97.800 will change the main trend to up.

The short-term range is 96.885 to 97.800. Its 50% level or pivot at 97.345 is resistance. Trading below this level is helping to generate today’s downside bias.

The major retracement zone is 97.140 to 96.630. This zone helped put in the bottom at 96.885 on October 21. This zone is controlling the longer-term direction of the index.

Daily Technical Forecast

Given the early price action and the current price at 97.060, the direction of the December U.S. Dollar Index into the close on Friday is likely to be determined by trader reaction to the slow-moving uptrending Gann angle at 97.025.

A sustained move over 97.025 will indicate that buyers are coming in to defend the main bottom at 96.885. Overcoming 97.165 will indicate the buying is getting a little stronger. This could trigger a late session surge into the short-term pivot at 97.345.

A sustained move under 97.025 will signal the presence of sellers. The first downside target is the main bottom at 96.885. If this level fails as support then look for the selling to possibly extend into the major Fibonacci level at 96.630.