US Dollar Index (DX) Futures Technical Analysis – Waiting for Catalyst to Drive Prices Through 89.95

June U.S. Dollar Index futures traded mostly higher on Tuesday as investors awaited clues from the Federal Reserve on the U.S. economy and how aggressive the central bank will be in raising interest rates the rest of the year.

The dollar also posted a gain against the Japanese Yen after Bank of Japan governor Masayoshi Amamiya told reporters earlier on Tuesday there is a need to stick with an easy monetary policy to support the economy.

The Euro broke hard on Tuesday after a sharp drop in confidence among German investors in March according to a ZEW research institute survey.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. It turned up last week when buy stops were triggered over 89.93. Since the rally to 89.95 on Friday, the index has consolidated for two days with buyers coming in on the dips.

Tuesday’s price action suggests there may be enough upside momentum building to overcome 89.95 and breakout to the upside. The daily chart indicates there is room to run with 90.49 the next major upside target.

A trade through 89.095 will change the main trend to down with 88.915 the next target. This is a potential trigger point for an acceleration to the downside with 87.830 the next major downside target.

The main range is 87.830 to 90.490. Its retracement zone at 89.16 to 88.85 is the support. This zone stopped sellers at 89.095 and 88.915.

The short-term range is 90.490 to 88.915. Its retracement zone at 89.70 to 89.89 is currently being tested. This zone stopped rallies at 89.93 and 89.95 this month. Overtaking this area will confirm the upside bias.

Daily Swing Chart Technical Forecast

Based on Tuesday’s price action, trader reaction to 89.89 to 89.95 will determine the next move in the index. Overcoming and sustaining a rally over 89.95 will signal the presence of buyers. A sustained move under 89.70 will signal the return of sellers.