US Dollar Index (DX) Futures Technical Analysis – April 6, 2018 Forecast

June U.S. Dollar Index futures are trading slightly lower shortly before the release of the March U.S. Non-Farm Payrolls report at 1230 GMT.

A stronger-than-expected report will increase the odds of additional Fed rate hikes later this year. This should underpin the U.S. Dollar against a basket of currencies. Gains could be limited if appetite for risk is off.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up on Thursday when buyers took out the previous main top at 90.025. If the upside momentum continues today through the earlier high at 90.295 then the rally could extend into the March 1 top at 90.490.

The minor trend is also up. It changes to down on a move through 89.41.

Today’s session begins with the index up seven days from its last main bottom. This puts it in the window of time for a potentially bearish closing price reversal top. We’ve already had the higher high, now all we need is the lower close to form the chart pattern. If confirmed, this chart pattern could start a 2 to 3 day correction.

The main range is 90.490 to 88.530. Its retracement zone is 89.510 to 89.741. Trading on the strong side of this zone is helping to give the index a strong upside bias. Traders should treat this zone as support.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the June U.S. Dollar Index today is likely to be determined by trader reaction to yesterday’s close at 90.154.

A sustained move over 90.154 will indicate the presence of buyers. They will try to create the upside momentum needed to take out the intraday high at 90.295. If successful, this could trigger an eventual test of 90.490.

A sustained move under 90.154 will signal the presence of sellers. This will also put the index in a position to form a closing price reversal top which could trigger the start of a short-term correction.