US Dollar Index (DX) Futures Technical Analysis – Upside Momentum Building, Could Lead to Challenge of 90.99

The dollar rose against a basket of currencies on Wednesday, boosted by an upbeat outlook for the U.S. economy from Federal Reserve chair Jerome Powell. The new chairman’s testimony before Congress on Tuesday also raised expectations the central bank could aggressively increase interest rates over the next two years.

March U.S. Dollar Index futures settled at 90.551, up 0.271 or +0.30%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up when the index took out the February 8 main top at 90.455. The next upside target is the January 18 main top at 90.765. This is a possible trigger point for an extension of the rally into the January 9 main top at 92.360.

The index is now up eight sessions from the swing bottom at 88.15 on February 16. This puts it in the window of time for a possible closing price reversal top. If the rally continues then this will be a sign that the buying is getting stronger.

The short-term range is 92.36 to 88.15. Its retracement zone is 90.255 to 90.752. This zone is currently being tested. Overcoming this zone will help support the upside bias.

The main range is 93.825 to 88.150. Its retracement zone at 90.99 to 91.66 is the primary upside target. Trader reaction to this zone should determine the longer-term direction of the index.

Daily Swing Chart Technical Forecast

Based on Wednesday’s close at 90.551 and the upside momentum into the close, it looks as if buyers are going to go after the short-term Fib level at 90.75 and the long-term 50% level at 90.99 early in the session on Thursday. Trader reaction to this zone should determine the tone of the market the rest of the session.

There is plenty of room to the upside over 90.99 so this is likely the trigger point for an acceleration to the upside with 91.66 the next major target.

A failure to overcome 90.75 could lead to a break back into the short-term 50% level at 90.25. A break through this level will indicate increased selling pressure.