June U.S. Dollar Index futures are trading lower. Sellers came in on the opening in reaction to China’s retaliation against the U.S. for recent tariffs on steel and aluminum. This could be the start of the trade war that many have been predicting. Since this could hurt the U.S. economy, traders are selling dollars.
Daily Technical Analysis
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom at 88.530 on March 27.
A trade through 90.025 will change the main trend to up. A move through 88.530 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The minor trend is also down. Today’s early price action made 89.84 a new minor top. A trade through this level will change the minor trend to up and confirm the upside momentum.
The main range is 87.830 to 90.490. Its retracement zone at 89.160 to 88.85 is support.
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Daily Technical Forecast
Based on the early price action, the direction of the index today is likely to be determined by trader reaction to the long-term uptrending Gann angle at 89.71.
A sustained move under 89.71 will indicate the presence of sellers. This could trigger a break into a steep uptrending Gann angle at 89.28. Watch for a technical bounce on the first test of this angle.
If 89.28 fails as support then look for the selling to extend into at least 89.16, followed by an uptrending Gann angle at 88.91.
Regaining 89.71 will signal the return of buyers. This could create the upside momentum needed to challenge the downtrending Gann angle at 89.83 and the minor top at 89.84.
Overtaking 89.84 could drive the index into the main top at 90.025. This is a possible trigger point for an acceleration into the next downtrending Gann angle at 90.16.