U.S. Dollar Index (DX) Futures Technical Analysis –Strengthens Over 93.135, Weakens Under 92.510

The U.S. Dollar is trading flat against a basket of major currencies early Monday after beginning the week slightly better, as U.S. economic strength and a vaccine rollout proceeding much more quickly than in Europe drew investors into the greenback.

At 03:45 GMT, June U.S. Dollar Index futures are trading 92.795, up 0.020 or +0.02%.

Dollar index traders are paying close attention to the movement in the Euro and Japanese Yen as these two currencies hover near key levels.

The single currency is heading for its worst month since mid-2019 as Europe’s faltering vaccination program runs into a wave of new infections, a bearish signal as positioning data shows investors remain heavily long Euros.

Meanwhile this year’s 76-basis-point rise in 10-year Treasury yields has opened the gap to its widest since last February. That has drawn Japanese investment, which has in turn helped push the Yen down nearly 6% for the quarter.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 92.490 will signal a resumption of the uptrend. The main trend will change to down on a move through 91.290.

On the downside, support is a series of retracement levels at 92.510, 92.200, 91.870 and 92.620. Holding above these levels will give the index a strong upside bias.

Daily Swing Chart Technical Forecast

Two days of inside moves suggests the direction of the June U.S. Dollar Index futures contract on Monday will be determined by trader reaction to 92.940 and 92.520.

Bullish Scenario

A sustained move over 92.940 will indicate the presence of buyers with the first target the November 11, 2020 main top at 93.135. This level is a potential trigger point for an acceleration to the upside with the November 2, 2020 main top at 94.085 the next major upside target.

Bearish Scenario

A sustained move under 92.520 will signal the presence of sellers. Crossing to the weak side of the Fibonacci level at 92.510 will indicate the selling is getting stronger. Since the main trend is up, this could lead to a labored break with potential targets 92.200, 91.870 and 91.620.