US Dollar Index (DX) Futures Technical Analysis – Trying to Grind Through Major Retracement Levels from 90.255 to 90.99

March U.S. Dollar Index futures surged to the upside in reaction to hawkish comments from Fed Chair Jerome Powell. While testifying before a congressional committee, he laid out a case where the Fed could raise rates more than it currently forecasts. Powell said, however, he would not ‘pre-judge’ the Fed forecast that will be released at the end of the March meeting.

Powell’s comment fueled a surge in bond yields, driving up the U.S. Dollar.

Daily Technical Analysis

The main trend is down according to the daily swing chart, but momentum is trending higher. A trade through 90.455 will change the main trend to up.

The minor trend changed to up on the move through 90.17. This move also negated the minor closing price reversal top. The new minor bottom is 89.425.

The intermediate range is 92.36 to 88.15. Its retracement zone at 90.255 to 90.752 is currently being tested. Trader reaction to this zone will set the near-term tone of the market.

The main range is 93.825 to 88.15. Its retracement zone at 90.99 to 91.66 is the primary upside target. Trader reaction to this zone will set the longer-term tone of the market.

Daily Technical Forecast

Based on the current price at 90.315 and the earlier price action, the direction of the index into the close is likely to be determined by trader reaction to the intermediate 50% level at 90.255.

A sustained move over 90.255 will indicate the presence of buyers. This could drive the market into a pair of long-term downtrending Gann angles at 90.56 and 90.58. This is followed by a Fibonacci level at 90.75 and a 50% level at 90.99.

The 50% level at 90.99 is the trigger point for an acceleration to the upside with the next Fibonacci target coming in at 91.66.

A sustained move under 90.255 will signal the presence of sellers. This could drive the index through 90.24 and into an uptrending Gann angle at 89.90. This angle was taken out earlier in the session, but buyers quickly regained it.

A sustained move under 89.90 later in the session could trigger the start of a steep sell-off with 89.03 the next major downside target.