U.S. Dollar Index (DX) Futures Technical Analysis
New York (Mar 21) The June U.S. Dollar Index is called lower this morning based on a weak overnight trade. The main trend is down on the daily chart. It will turn up on a move through the February 27 swing top at 80.745.
The main range is 81.61 to 79.375. This range forms a retracement zone at 80.49 to 80.76. On Thursday, the lower or 50% level stopped the rally at 80.50.
A new short-term range may be forming between 79.375 and 80.50. This makes its retracement zone at 79.94 to 79.81 the next likely downside target. Sellers will try to drive the market through this zone on the way to a new low. Counter-trend buyers will try to stop the break in an effort to form a potentially bullish secondary higher bottom. Remember the first leg up is typically short-covering. Real buying comes in on the retracement of the first rally.
Downtrending resistance comes in at 80.50 and 80.55. The first angle forms a resistance cluster with the 50% level at 80.49 and yesterday’s high. The first sign of weakness today will be a break under a downtrending angle at 80.25.
And a lower U.S. Dollar Index will fuel gold and silver prices higher.