U.S. Dollar Index (DX) Futures Technical Analysis – Rally Through 93.275 Targets 93.545

The U.S. Dollar held near three-week lows against a basket of currencies on Monday amid concerns over fiscal stimulus in the United States. The greenback was steady, having seen its biggest loss in six weeks on Friday, when investors upped their bets that a fiscal stimulus package would be agreed to mitigate the economic fallout from COVID-19.

At 10:49 GMT, December U.S. Dollar Index futures are trading 93.160, up 0.095 or +0.10%.

The dollar has been buffeted by the on-again, off-again stimulus negotiations. Still, with the November 3 election only weeks away, investors are betting that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.

On Sunday, the Trump administration called on Congress to pass a stripped-down version of the relief bill, while negotiations on a broader package continue. Traders are also leaning toward a win by Democratic candidate Joe Biden that would likely lead to an even bigger stimulus package after he’s elected.

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 trade through 94.795 will signal a resumption of the uptrend.

The minor trend is down. This is driving the downside momentum. A move through 93.00 will indicate the selling is getting stronger, while a move through 93.975 will change the minor trend to up.

The first minor range is 91.750 to 94.795. Its 50% level at 93.275 is resistance. The second minor range is 94.090 to 93.000. Its 50% level at 93.545 is another potential resistance level.

Daily Swing Chart Technical Forecast

The early range suggests the direction of the December U.S. Dollar Index on Monday will be determined by trader reaction to the 50% level at 93.275 and Friday’s low at 93.000.

Bullish Scenario

A sustained move over 93.275 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly surge into the next 50% level at 93.545.

Bearish Scenario

The inability to overcome 93.275 will signal the presence of sellers. The first downside target is 93.00. Taking out this level could trigger a further decline into the main bottom at 92.755.