US Dollar Index (DX) Futures Technical Analysis – Major Gann Angle Resistance at 90.26 and 90.58; Trigger Points for Upside Breakout

The U.S. Dollar closed higher against a basket of currencies last week, helped by a weaker Euro and stronger-than-expected U.S. jobs data. This week’s price action is likely to be largely influenced by the U.S. Consumer Inflation report.

March U.S. Dollar Index futures settled at 90.065, up 0.159 or +0.18%.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. The main trend will change to up on a trade through 93.825. A move through 88.150 will signal a resumption of the downtrend.

The minor trend is also down. The trend will change to up on a trade through 90.885.

The short-term range is 88.150 to 90.885. Its retracement zone at 89.518 to 89.195 is providing support. This zone is controlling the short-term direction of the index. Aggressive counter-trend buyers are trying to form a potentially bullish secondary higher bottom at this zone.

The main range is 93.825 to 88.150. Its retracement zone at 90.988 to 91.657 is the primary upside target. Since the main trend is down, sellers are likely to show up on a test of this zone.

Weekly Technical Forecast

Based on last week’s close at 90.065 and the price action, the direction of the dollar index this week is likely to be determined by trader reaction to the short-term 50% level at 89.518.

A sustained move over 89.518 will indicate the presence of buyers. This could generate the upside momentum needed to challenge a pair of downtrending Gann angles at 90.26 and 90.58. Since the main trend is down, sellers are likely to show up on a test of these angles. Overtaking these angles, however, could trigger a rally into the main retracement zone at 90.988 to 91.657.

A sustained move under 89.518 will signal the presence of sellers. This could drive the market into the short-term Fibonacci level at 89.195. A failure to hold this price will signal the return of sellers. This could trigger an acceleration to the downside with the next two targets 88.150 and 88.067.