US Dollar Index (DX) Futures Technical Analysis – Short-Covering Rally?, Yeah; Change in Trend? Not Likely
March U.S. Dollar Index futures traded lower on Tuesday. The inside move suggests investor indecision and impending volatility. Sellers were probably taking a breather after last week's rout drove the index to a three-year low.
The main trend is down according to the daily swing chart. A trade through 90.045 will signal a resumption of the downtrend. The daily chart indicates there is plenty of room to the downside with the next major target the December 16, 2014 main bottom at 88.067.
The main driver of the weakness lately has been the Euro. It is weighted heavily in the calculation of the dollar index. It is also posting an inside move as investor try to decide whether to continue buying strength, or play for a short-term break into a value area.
Overcoming the old bottoms at 90.68 and 91.00 will indicate the short-covering is getting stronger. However, this move won't change the trend to up. The buying is going to have to be strong enough to overtake the last swing top at 92.36 in order to do that.
This article was originally posted on FX Empire
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