U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 97.155, Weakens Under 96.690
The U.S. Dollar is trading nearly flat against a basket of major currencies as investors continue to assess the potential impact of the surge in coronavirus cases on the global economy. Traders betting on a rapid recovery are putting the downside pressure on the market, while those worried about a second-wave of cases shutting down key areas of the economy, are using the greenback as a safe-haven refuge.
At 08:15 GMT, September U.S. Dollar Index futures are trading 96.825, down 0.014 or -0.01%.
The dollar is holding steady on Wednesday as a resurgence of COVID-19 cases in the United States and the return of lockdowns in some countries boosted safe-haven demand for the U.S. currency.
Risk sentiment was also undermined after Federal Reserve officials expressed concern that rising coronavirus cases could harm economic growth just as stimulus measures start to expire. Three Fed officials said they were worried that the surge in infections threatens to pinch consumer spending and job gains just as some stimulus programs are set to expire. One Fed policymaker pledged more support ahead from the U.S. central bank.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since June 30. A trade through 96.320 will change the main trend to down. Taking out 97.810 will reaffirm the uptrend.
The first minor range is 95.570 to 97.810. Its 50% level at 96.690 is providing support.
The second minor range is 97.81 to 96.50. Its 50% level at 97.155 is acting like resistance.
Daily Swing Chart Technical Forecast
Based on the recent price action and the current price at 96.825, the direction of the September U.S. Dollar Index the rest of the session on Wednesday is likely to be determined by trader reaction to the pair of 50% levels at 97.155 and 96.690.
A sustained move over 97.155 will signal the presence of buyers. If this creates enough upside momentum then look for a possible acceleration to the upside with the next target the main top at 97.810.
The inability to overcome 97.155 will signal weak buying and strong selling. Taking out 96.690 with strong volume could trigger a break into the main bottom at 96.320. This is a potential trigger point for an acceleration to the downside.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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