US Dollar Index (DX) Futures Technical Analysis – Trend Changes to Up on Move Through 90.025

June U.S. Dollar Index futures finished higher on Tuesday but the rally fell short of the March 20 main top. An easing of concerns over a trade war with China and increased demand for higher risk assets supported the move. Early Wednesday, the index is trading lower, mostly in response to a higher Euro and Japanese Yen.

Traders will continue to monitor the news regarding a trade war, but they will also begin positioning themselves ahead of Friday’s U.S. Non-Farm Payrolls report.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through 90.025 will change the main trend to up. If this move generates enough upside momentum, we could see an eventual move into the next main top at 90.490.

The minor trend is up. It turned up on Tuesday when buyers took out 89.84. A trade through 89.41 will change the minor trend to down.

The main range is 90.490 to 88.530. Its retracement zone at 89.74 to 89.51 is new support. Trading on the strong side of this zone is helping to set a bullish tone. This zone is controlling the longer-term direction of the market.

Daily Technical Forecast

Based on the early price action, trader reaction to a cluster of numbers at 89.78 to 89.74 is likely to determine the direction of the index on Wednesday.

A sustained move over 89.78 will signal the presence of buyers. If this move generates enough upside momentum, we could see a surge though 89.945 then 90.025.

The first target over 90.025 is a downtrending Gann angle at 89.77. Sellers could come in on the first test of this angle. This angle is also a potential trigger point for an acceleration into another downtrending Gann angle at 90.13. This is the last potential resistance angle before the 90.49 main top.

A sustained move under 89.74 will indicate the presence of sellers. This is a potential trigger point for a steep break into the 50% level at 89.51. We could see a technical bounce on the first test of this level. But if it fails then look for an acceleration to the downside with the next major support cluster at 89.16.