U.S. Dollar Index Futures (DX) Technical Analysis – Needs to Hold 98.050 to Sustain Upside Momentum
The U.S. Dollar is inching higher against a basket of currencies on Thursday as risk appetite continues on reports of a possible treatment for the new coronavirus out of China that has gripped the world and caused major disruptions among global businesses.
Increasing risk appetite on Wednesday led to the greenback’s sharp rise against the safe-haven Japanese Yen and Swiss Franc. While better than expected U.S. economic data helped boost the dollar against the Euro, British Pound and Canadian Dollar.
At 09:31 GMT, March U.S. Dollar Index futures are trading 98.180, up 0.022 or +0.02%.
Later today, investors will get the opportunity to react to the latest news on Challenger Job Cuts, Preliminary Nonfarm Productivity, Preliminary Unit Labor Costs and Weekly Unemployment Claims.
Daily Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out the previous day’s high. The main trend will change to down on a trade through 97.165. The next major upside target is the October 1, 2019 top at 98.735.
The main range is 98.735 to 96.020. Its retracement zone at 97.700 to 97.380 is new support. This zone is also controlling the longer-term direction of the index. Holding above this zone will help sustain the upside bias.
Daily Technical Forecast
Based on the early price action and the current price at 98.180, the direction of the March U.S. Dollar Index the rest of the session on Thursday is likely to be determined by trader reaction to the long-term downtrending Gann angle at 98.050.
Bullish Scenario
A sustained move over 98.050 will indicate the presence of buyers. If this move generates enough upside momentum then look for a move into the next downtrending Gann angle at 98.390. This is the last potential resistance angle before the 98.735 main top.
Bearish Scenario
A sustained move under 98.050 will signal the presence of sellers. If this move is able to generate enough downside momentum then the uptrending Gann angle at 97.690 will become the primary downside target.
This article was originally posted on FX Empire
