US Dollar Index (DX) Futures Technical Analysis – Plenty of Room to Downside if 93.04 Fails

U.S. Dollar bulls took a breather on Tuesday ahead of tomorrow’s release of the Fed minutes. A dip in U.S. Treasury yields also may have encouraged profit-taking after the dollar had posted gains for six consecutive sessions.

At 1923 GMT, June U.S. Dollar Index futures are trading 93.485, down 0.096 or -10%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 93.965 will signal a resumption of the uptrend. The index faces resistance at a pair of former tops at 93.87 and 94.42.

Falling back below the previous main top at 93.260 will indicate the selling is greater than the buying at current price levels.

The minor trend is up, but today’s lower-high, lower-low made 93.965 a new minor top.

The index is currently trading on the strong side of a major retracement zone at 93.35 to 92.30. The next major retracement zone comes in at 91.90 to 91.12.

The short-term range is 92.115 to 93.965. Its 50% level at 93.04 is acting like support.

Daily Swing Technical Forecast

Based on Tuesday’s price action, the direction of the index over the near-term is likely to be determined by trader reaction to the short-term 50% level at 93.040.

A sustained move over 93.04 will indicate that buyers are still coming in to support the rally. If this generates enough upside momentum then look for the rally to extend into the November 14 main top at 93.87 and the minor top at 93.965. Overtaking these levels could drive the index into the November 7 top at 94.42.

A sustained move under 93.04 will signal the presence of sellers. This level is a potential trigger point for an acceleration to the downside with targets coming in at 92.30, 92.115 and 91.90.