U.S. Dollar Index (DX) Futures Technical Analysis – Nearing Potential Fibonacci Support Level at 91.760

James Hyerczyk

Sun, Aug 30, 2020, 10:55 PM 2 min read

The U.S. Dollar is inching lower early Monday, while poised to produce its fourth consecutive monthly decline, it longest losing streak since the summer of 2017. Although the dollar is trading weaker against a basket of major currencies, it relatively steady when compared to last Friday’s heavy selling pressure.

After several days of consolidation early last week, the greenback began to retreat last Thursday after Federal Reserve Chairman Jerome Powell outlined an accommodative shift in the central bank’s approach to inflation. Investors interpreted the announcement to mean U.S. interest rates would stay lower for longer. Lower rates tend to make the dollar a less-desirable investment.

At 04:23 GMT, September U.S. Dollar Index futures are trading 92.270, down 0.109 or -0.12%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the last main bottom at 93.110 will reaffirm the downtrend. A trade through 93.480 will change the main trend to up according to the daily swing chart.

The nearest potential support is a long-term Fibonacci Level at 91.760.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the September U.S. Dollar Index on Monday is likely to be determined by trader reaction to Friday’s close at 92.379.

Bearish Scenario

A sustained move under 92.379 will indicate the selling pressure is getting stronger. The next downside target is the August 18 main bottom at 92.110. This is followed closely by the long-term Fibonacci level at 91.760. The latter is a potential trigger point for an acceleration to the downside with the next major target the September 21, 2018 main bottom at 90.805.

Bullish Scenario

We’ve already had a lower-low, so turning higher for the session on a trade through 92.379 will indicate the buying may be a little greater than the selling at current price levels.

This price action won’t change the main trend to up, but it could signal the start of a 2 to 3 day short-covering rally.

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This article was originally posted on FX Empire