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US Dollar Index (DX) Futures Technical Analysis – Found Support Inside Retracement Zone as Expected

The U.S. Dollar fell against a basket of currencies in a lackluster trade on Friday. Volume was extremely light ahead of the start of the G-7 conference. Most of the gains were attributed to a weaker Euro, but the upside was limited due to lower U.S. Treasury yields.

June U.S. Dollar Index futures settled at 93.537, up 0.161 or +0.17%.

U.S. Dollar Index
Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. The main trend won’t change to down unless 92.115 is taken out. This usually means we’re going to see a retracement of the first leg down before we go lower. A trade through 94.975 will signal a resumption of the uptrend.

The minor trend is down. This is why momentum is down. A trade through 93.19 will indicate the selling is getting stronger. A trade through 94.295 will turn the minor trend and momentum back to the upside.

The main range is 93.115 to 94.975. Its retracement zone is 93.545 to 93.21. Inside this zone is a major Fibonacci level at 93.35. The market found support inside this zone last week.

The short-term range is 94.975 to 93.19. Its retracement zone at 94.08 to 94.29 is the primary upside target. We could see aggressive counter-trend sellers on a test of this zone. They are going to try to form a secondary lower top.

Daily Swing Chart Technical Forecast

Based on the close and the price action on Friday, the direction of the U.S. Dollar Index on Monday is likely to be determined by trader reaction to the 50% level at 93.545.

A sustained move over 93.545 will indicate the presence of buyers. There is room to the upside with 94.08 to 94.29 the next upside target.

A sustained move under 93.545 will signal the presence of sellers. This could trigger the start of a labored break with targets at 93.35, 93.21 and 93.19. The next target under 93.19 is the minor bottom at 93.00. This is the trigger point for an acceleration to the downside.

This article was originally posted on FX Empire

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