US Dollar Index (DX) Futures Technical Analysis – Trend Changed to Up, Needs to Clear 90.79 for Big Rally

March U.S. Dollar Index futures rose on Monday and are trading firmer early Tuesday as the volatility in the global equity markets made the Greenback a more attractive safe-haven asset. Investors hurting from the drop in equities are seen trying to limit their losses by selling recently bullish currencies like the Euro, which in turn supports the dollar.

Daily Swing Chart Analysis

The main trend is up according to the daily swing chart. The trend turned up on Monday when buyers took out the January 30 main top at 89.48. There wasn’t much upside momentum on the move. If momentum does increase then we could see a rally into the January 18 main top at 90.765. This price is a possible trigger point for an acceleration into the January 9 top at 92.36.

A trade through 88.385 will change the main trend back to down with the next targets the January 25 bottom at 82.255 and the December 16, 2014 main bottom at 88.067.

The short-term range is 88.255 to 89.58. Its 50% level or pivot is 88.92. This level is controlling the short-term direction of the market. Closing above this level gives the index a slight upside bias.

The intermediate range is 90.765 to 88.255. Its retracement zone is 89.51 to 89.81. The index is currently testing this zone. Upside momentum will increase if buyers overcome this level.

The main range is 92.36 to 88.255. Its retracement zone at 90.31 to 90.79 is the primary upside target.

Daily Swing Chart Forecast

Based on Monday’s close at 89.405 and the early price action, the direction of the dollar index today will be determined by trader reaction to the 50% level at 89.51.

A sustained move over 89.51 will signal the presence of buyers. This could drive the index into 89.81.

Look for an acceleration to the upside if 89.81 is taken out with 90.31 the first objective. Overcoming this level could lead to a test of 90.79.

The Fibonacci level at 90.79 is the trigger point for an acceleration to the upside since the nearest resistance is way up at 92.36.