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U.S. Dollar Index (DX) Futures Technical Analysis – 93.00 Upside Target, 91.45 Downside Target

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The U.S. Dollar is trading higher against a basket of major currencies shortly before the release of the Fed minutes at 18:00 GMT on Wednesday. The move is likely short-covering and position squaring after the index hit a more than two-year low on Tuesday.

Investors awaiting the release of the minutes from the Fed’s July monetary policy meeting will be looking for cues on future policy measures to support the virus-stricken economy.

Most analysts agree the Fed is not expected to indicate any new monetary stimulus initiatives in the minutes, however, investors will be watching for any change to the Fed’s approach to inflation that could be negative for the dollar. The greenback could spike lower on the news.

At 17:20 GMT, September U.S. Dollar Index futures are trading 92.720, up 0.461 or +0.50%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 92.110 will signal a resumption of the downtrend. The main trend will change to up on a move through the last swing top at 93.890.

The minor trend is also down. A trade through 93.410 will change the minor trend to up. This will also shift momentum to the upside.

The new minor range is 93.890 to 92.110. Its retracement zone at 93.00 to 93.210 is the primary upside target and nearest resistance zone.

Short-Term Outlook

The next move by the September U.S. Dollar index will be determined by the Fed minutes. If the Fed is more accommodative then look for a breakdown under 92.110 with 91.450 the next major downside target.

If the Fed is a little more confident in the economy then we could see a short-covering rally into 93.00 to 93.210. Since the main trend is down, sellers could come in on a test of this zone. Momentum could start to shift to the upside if buyers can overcome 93.210.

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This article was originally posted on FX Empire

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