US Dollar Index (DX) Futures Technical Analysis – May Have Enough Downside Momentum to Challenge 91.00 to 90.68

The U.S. Dollar plunged against a basket of currencies on Friday as support continued to erode for the Greenback due to concerns over the impact of the Fed’s rate hikes and the Republican-led tax reform plan on U.S. economic growth.

March U.S. Dollar Index futures settled at 91.826, down -0.474 or -0.51%.

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Friday when sellers took out the December 1 bottom at 92.265 and the November 27 main bottom at 92.130.

The downside momentum may be strong enough to eventually challenge the September 20 main bottom at 91.00 and the September 8 main bottom at 90.68.

The index isn’t close enough to change the main trend to up, but it is in the window of time to form a potentially bullish closing price reversal bottom. This could trigger a 2 to 3 day short-covering rally.

The main range is 90.68 to 94.76. Its retracement zone at 92.71 to 92.23 is controlling the near-term direction of the market.

The close under the Fibonacci level at 92.23 is a sign of weakness and that the selling pressure is getting stronger.

Based on the close at 91.83, the nearest downside targets are 91.00 and 90.68.

The resistance is the former bottom at 92.13, the Fibonacci level at 92.23, the former bottom at 92.27 and the former bottom at 92.37. Overcoming these levels will indicate the selling is getting weaker, or the buying is getting stronger.

Don’t expect the start of a major rally unless the buying is strong enough to overcome and sustain a rally over the major 50% level at 92.71.