U.S. Dollar Index Futures (DX) Technical Analysis – Bearish Under 96.405 with 95.925 Next Target
The U.S. Dollar is hovering near a three-week low on Tuesday in thin-year end volume as investors favored riskier assets, led by renewed optimism about global growth. Encouraging news on the Sino-U.S. trade deal boosted risk sentiment in currency markets.
Investor sentiment has largely improved in December with the U.S. and China recently reaching an agreement on a phase one trade deal.
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The South China Morning Post, citing a source, reported Monday that top Chinese trade negotiator and Vice Premier Liu He is set to visit Washington this week to sign the phase one deal with the U.S.
Beijing has accepted the U.S. invitation for a deal signing in Washington, and the Chinese delegation will stay in the U.S. for a few days until the middle of next week, according to the report.
At 10:01 GMT, March U.S. Dollar Index futures are trading 96.280, down 0.127 or -0.13%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Monday when sellers took out the previous main bottom at 96.295. A trade through 97.405 will change the main trend to up.
The index is currently trading inside a major retracement zone at 96.405 to 95.925. Trader reaction to this zone will determine the longer-term direction of the index.
Daily Technical Forecast
Based on the early price action and the current price at 96.280, the direction of the March U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the major 50% level at 96.405.
Bearish Scenario
A sustained move under 96.405 will indicate the presence of sellers. Crossing to the weak side of the steep downtrending Gann angle at 96.155 will indicate the selling is getting stronger. If this move creates enough downside momentum then look for the selling to possibly extend into the major Fibonacci level at 95.925.
Bullish Scenario
A sustained move over 96.405 will signal the presence of buyers. This could trigger a strong short-covering rally with the next targets a pair of downtrending Gann angles at 96.735 and 96.780.