US Markets

U.S. Dollar Index Futures (DX) Technical Analysis – Testing Key Retracement Zone: Strengthens Over 98.380, Weakens Under 98.095 -

Upbeat news on U.S.-China trade relations lifted investor sentiment on Monday, driving the U.S. Dollar higher against a basket of currencies. China and the United States are very close to a “phase one” trade deal, the Global Times, a tabloid run by the ruling Communist Party’s official People’s Daily, said on Monday, discounting “negative” media reports.

At 19:24 GMT, December U.S. Dollar Index futures are trading 98.250, up 0.074 or +0.08%.

In other news, speculators raised net long bets on the dollar to a five-week high in the week to November 19, data from the U.S. Commodity Futures Trading Commission showed.

The dollar gained ground against the heavily-weighted Euro. The British Pound traded better against the dollar as polls continued to show the ruling Conservatives as runaway favorites to win the December 12 election with a pledge to implement Brexit and halt 3-1/2 years of political uncertainty.

Increased demand for higher risk assets helped drive down the lower-yielding Japanese Yen. An improving U.S. economy weighed on the Canadian Dollar.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 98.300 will reaffirm the uptrend. The main trend will change to down on a move through 97.550.

The main range is 99.305 to 96.885. Its retracement zone at 98.095 to 98.380 is currently being tested. This zone is controlling the longer-term direction of the U.S. Dollar Index.

Daily Technical Forecast

Based on the early price action and the current price at 98.250, the direction of the December U.S. Dollar Index into the close is likely to be determined by trader reaction to the 50% level at 98.095.

Bullish Scenario

A sustained move over 98.095 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into the main top at 98.300, followed by the main Fibonacci level at 98.380.

The Fib level at 98.300 is a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to the upside with the next target the October 8 top at 98.955.

Bearish Scenario

A sustained move under 98.095 will signal the presence of sellers. The first target is a minor pivot at 97.925. This is followed by a short-term retracement zone at 97.630 to 97.470. Inside this range is the main bottom at 97.550.

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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