US Dollar Index (DX) Futures Technical Analysis – Key Pivot on Daily Chart is 93.750

March U.S. Dollar Index is trading lower near the close of the session. Early in the day, the dollar was under pressure due to concerns over tax reform, but the selling pressure escalated throughout the session as the Euro gained strength. The Euro is a big influence on the dollar futures contract because it makes up about 57% of the index.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart, however, the trend has been wavering since it reached a high at 94.210 on December 12, the day before the Fed issued a “dovish” monetary policy statement. Although the central bank raised its benchmark interest rate as widely expected, it didn’t increase the number of rate hikes in 2018 and 2019, which disappointed investors.

A trade through 94.210 will signal a resumption of the uptrend. If the buying volume increases on this move then we could see an acceleration to the upside with the next major target the November 7 main top at 95.070.

A trade through 93.275 will change the main trend to down with potential downside targets at 92.550 and 93.430.

The price action is also being dictated by a number of retracement zones.

The main range is 95.07 to 92.43. Its retracement zone at 93.750 to 94.062 is controlling the longer-term direction of the market. The index has been straddling this zone since December 7 and it has been acting like resistance.

On Monday, the market crossed to the weak side of this zone for a fourth straight day. This is helping to give the index a downside bias. A sustained move under the lower or 50% level at 93.750 will indicate the selling pressure is getting stronger.

The short-term range is 92.550 to 94.210. Its retracement zone at 93.380 to 93.184 is the primary downside target. This zone stopped the selling last week at 93.275.

The major long-term retracement zone is 92.933 to 92.428. This zone provided support on November 27 when the index reached a bottom at 93.430 then again on December 1 when the index formed another bottom at 92.550.

The 50% level at 93.750 is likely to be the key pivot price this week.