Note

U.S. Dollar Index (DX) Futures Technical Analysis – Upside Target 94.770; Downside Target Moves Up to 93.530

Verified Media
· Views 1,315

The U.S. Dollar is inching lower against a basket of currencies on Wednesday after hitting its highest level since July 24 earlier in the session. The early rally was fueled by investors jumping into the safety of the greenback on risks to the global economic recovery from another round of coronavirus-induced curbs in Europe and the U.K. due to rising COVID-19 cases.

At 10:22 GMT, December U.S. Dollar Index futures are trading 94.010, down 0.008 or -0.01%.

Traders are saying the early session rally was fueled by follow-through buying from Tuesday that was triggered by the hawkish tone from a top Federal Reserve official, who said further quantitative easing may not provide an additional lift to the U.S. economy.

Putting some pressure on the index shortly before the record session opening is a rebound in the Euro, the British Pound and Japanese Yen.

Later today, the direction of the U.S. Dollar is likely to be influenced by the comments from three Fed speakers and the U.S. Flash Manufacturing and Services PMI reports.

U.S. Dollar Index (DX) Futures Technical Analysis – Upside Target 94.770; Downside Target Moves Up to 93.530

Daily December U.S. Dollar Index


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at 94.300 will signal a resumption of the uptrend. The main trend will change to down on a break through the main bottom at 92.755.

The main range is 97.785 to 91.750. Its retracement zone at 94.770 to 95.480 is the primary upside target. Even though the main trend is up, we expect to see sellers show up on the first test of this area. However, overtaking the upper level at 95.480 could trigger an acceleration to the upside.

The first minor range is 92.755 to 94.300. Its 50% level at 93.530 is a potential downside target.

The second minor range is 91.750 to 94.300. Its 50% level at 93.025 is another potential target.

Short-Term Outlook

The series of higher-bottoms and higher-tops means there are buyers in there. The move is being fueled by a combination of safe-haven buying and the thought that the economy is strengthening enough without the need for additional stimulus measures from the Fed.

For the longer-term bulls, the key level to overcome is 95.480. The daily chart indicates there is plenty of room to the upside so taking out this level could fuel an acceleration to the upside. This would also indicate that the current rally is more than just short-covering after this summer’s prolonged downtrend.

On the downside, we should know how interested the buyers are on a test of the minor 50% level at 93.530. A successful test of the next pivot at 93.025 will indicate that buyers are coming in to defend the main bottom at 92.755.

On the upside, a move through 94.300 will indicate the return of buyers. This could create the upside momentum needed to challenge the main retracement zone at 94.770 to 95.480. Look for counter-trend sellers on the first test of this area, but be prepared for a potential breakout over the upper or Fibonacci level. #USDollarIndex##FX#


Reprinted from FXEmpire,the copyright all reserved by the original author.

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.
avatar

Hot

Im kind of worried though
What do you think about this?

-THE END-