U.S. Dollar Index Futures (DX) Technical Analysis – Trade Through 97.005 Confirms Closing Price Reversal Top

Based on the early price action, the direction of the March U.S. Dollar Index futures contract on Monday is likely to be determined by trader reaction to the 50% level at 97.035.
James Hyerczyk
U.S. Dollar

The U.S. Dollar is inching lower early Monday after posting a potentially bearish closing price reversal top the previous session. On Friday, the dollar rose to a two-week high against a basket of major currencies before turning lower for the session.

Last week, the greenback posted its best weekly performance in two months, helped by easing geopolitical tensions between the United States and Iran. On Friday, the dollar slid lower in reaction to a disappointing U.S. Non-Farm Payrolls report.

March U.S. Dollar Index futures settled on Friday at 97.078, down 0.084 or -0.09%.

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 to the upside. A trade through 97.405 will change the main trend to up. A move through 96.020 will signal a resumption to the downside.

The minor trend is up. This changed momentum to the upside.

On Friday, the index formed a potentially bearish closing price reversal top. A trade through 97.005 will confirm the chart pattern. This could trigger the start of a 2 to 3 day correction of the short-term rally.

Two major retracement zones are controlling the price action. On the downside, the support is being provided by a longer-term retracement zone at 96.700 to 96.220. On the upside, the resistance zone comes in at 97.380 to 97.700.

The short-term range is 98.045 to 96.020. Its retracement zone at 97.035 to 97.270 is also resistance. It essentially stopped the buying on Friday.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the March U.S. Dollar Index futures contract on Monday 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 move creates enough upside momentum then look for a rally 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 Friday’s closing price reversal top. This could trigger an acceleration to the downside with 96.700 the next likely downside target.

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