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U.S. Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 93.275 Sets the Tone -

The U.S. Dollar is edging lower against a basket of major currencies on Friday and was headed for a second consecutive week of losses as investors increased bets Democratic candidate Joe Biden would win the U.S. presidential election and offer more fiscal stimulus after the November 3 elections.

At 08:35 GMT, December U.S. Dollar Index futures are trading 93.375, down 0.273 or -0.29%.

Several Wall Street banks forecast some kind of stimulus package no matter which candidate wins, but say a Biden presidency, if Democrats also retake control of the U.S. Senate, would be likely to result in a bigger one. UBS Asset Management, for example, is assigning a 75% probability of a Biden win.

A stronger Euro is also helping to pressure the U.S. Dollar Index. It has held firm this week as prospects for a Brexit deal appeared to improve.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. The main trend will change to down on a move through 92.755. A move through 94.795 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through 93.975 will change the main trend to up. Taking out 94.090 will reaffirm the minor trend.

The short-term range is 91.750 to 94.795. Its 50% level at 93.275 is the next potential support level. Watch for a technical bounce on the first test of this level. This is the last potential support before the 92.755 main bottom.

Daily Swing Chart Technical Forecast

The early price action suggests the direction into the close is likely to be determined by trader reaction to 93.275.

Bearish Scenario

A sustained move under 93.275 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with 92.755 the next likely downside target. Taking out this level will change the main trend to down and could trigger another acceleration into 91.75 over the near-term.

Bullish Scenario

A sustained move over 93.275 will indicate that buyers are coming in to defend the uptrend. This move won’t mean much unless they are able to overcome the pair of minor tops at 93.975 and 94.090.

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This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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