U.S. Dollar Index (DX) Futures Technical Analysis – Trade Thru 90.620 Could Trigger Acceleration to Downside
The U.S. Dollar is trading lower against a basket of peers early Monday, hitting its lowest level since March 3 in the process.
Ahead of the opening, investors were betting on Fed policymakers to lean toward reducing bond purchases at its meeting on Tuesday and Wednesday, however, Reuters is reporting that there is speculation U.S. Federal Reserve Chairman Jerome Powell will shun talk of tapering bond purchases at a policy meeting this week.
At 06:21 GMT, June U.S. Dollar Index futures are trading 90.700, down 0.139 or -0.15%.
The dollar index is also being pressured by further gains in the Euro. The single-currency rose to near a two-month high against the greenback before data later on Monday forecast to show an improvement in German business sentiment, which would bolster hopes for a brighter economic outlook.
A survey from Germany’s Ifo Institute due later on Monday is expected to show business conditions continued to improve in Europe’s largest economy.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through the March 3 main bottom at 90.620 will reaffirm the downtrend.
A move through 93.470 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, traders should continue to watch for a closing price reversal bottom.
The minor trend is also down. A trade through 91.425 will change the minor trend to up. This will also shift momentum to the upside.
The short-term range is 89.655 to 93.470. Its retracement zone at 91.100 to 91.55 is resistance.
The main range is 94.590 to 89.155. Its retracement zone at 91.870 to 92.510 is also resistance.
The index is currently trading on the weak side of both retracement zones, putting it in a bearish position.
Daily Swing Chart Technical Forecast
The direction of the June U.S. Dollar Index on Monday is likely to be determined by trader reaction to 90.840.
Bearish Scenario
A sustained move under 90.840 will indicate the presence of sellers. Taking out the main bottom at 90.620 will reaffirm the downtrend. This could trigger an acceleration into the February 25 main bottom at 89.655.
Bullish Scenario
A sustained move over 90.840 will signal the presence of buyers. The first upside target is 91.100, followed by 91.425 and 91.555.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
