US Dollar Index (DX) Futures Technical Analysis – Starting to Trend Higher, but Still Facing Series of Resistance Levels

The U.S. Dollar rose on Wednesday for a fourth straight session against a basket of currencies, helped by steady U.S. Treasury yields and a weaker Euro.

Yields are recovering from Monday’s stock market rout as investors shed their safe-haven positions. The Euro weakened in the wake of reports that the leader of Germany’s Social Democrats (SPD), Martin Schulz, would not be taking over as finance minister of Europe’s biggest economy. The Euro’s fall accelerated after European Central Bank policymaker Ewald Nowotny told the German Wiener Zeitung newspaper the United States is deliberately weakening the dollar.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. The trend turned up early this week when buyers took out the January 30 main top at 89.480. This move also confirmed the double-bottom formed at 88.255 and 88.385.

The next main top is 90.765. Taking out this top will reaffirm the uptrend.

The short-term range is 90.765 to 88.255. Its retracement zone is 89.51 to 89.81. This zone is new support. The close above it is also giving the market an upside bias.

The intermediate range is 92.360 to 88.255. Its retracement zone is 90.31 to 90.79.

The main range is 93.825 to 88.255. Its retracement zone at 91.04 to 91.70 is the primary upside target.

Daily Swing Chart Forecast

Based on Wednesday’s price action, the direction of the index on Thursday is likely to be determined by trader reaction to the 50% level at 90.31.

Taking out 90.31 will signal the presence of buyers. This could create the upside momentum to challenge the main top at 90.765, the Fib level at 90.72 and the main 50% level at 91.04. This is a possible trigger point for an acceleration into 91.70.

A failure to overcome 90.31 will indicate the return of sellers. This could lead to a pullback into 89.81 then 89.51. If 89.51 fails as support then look for a further pullback.