U.S. Dollar Index Futures (DX) Technical Analysis – July 3, 2019 Forecast
The U.S. Dollar is trading slightly lower against a basket of currencies early Wednesday with most traders eyeing global interest rates, while awaiting the release of a slew of major economic reports from Europe and the United States.
The dollar is being pressured primarily by the Euro and the Japanese Yen for a second session. On Tuesday, a reversal to the upside in the Euro, despite signs of a weakening Euro Zone economy, helped flip the dollar index lower, erasing earlier gains. The greenback was further pressured by safe-haven buying of the Japanese Yen.
Traders were particularly interested in the direction of U.S. Treasury and German bund yields as concerns about global economic growth continued to strengthen. These renewed worries helped drive investors into safe-haven assets.
The yield on the benchmark 10-year Treasury note was 6 basis points lower at around 1.977%. The yield on Germany’s 10-year bund fell to -0.367%.
Later today, investors will get the opportunity to react to the latest services PMI data from Europe as well as U.S. reports on the ADP Non-Farm Employment Change and the ISM Non-Manufacturing PMI.
The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on June 25 at 95.365.
The main trend will change to up on a trade through 97.265. A move through 95.365 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The minor trend is up. This is controlling the momentum.
The main range is 94.696 to 97.715. Its retracement zone at 96.205 to 95.850 is controlling the longer-term direction of the index. Currently, the market is trading on the strong side of this zone.
The short-term range is 97.265 to 95.365. Its retracement zone at 96.315 to 96.540 is resistance. This zone stopped the rally on Tuesday. Overcoming this zone will mean the buying is getting stronger.
Based on the early price action, the direction of the September U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the main 50% level at 96.205.
A sustained move over 96.205 will indicate the presence of buyers. The first resistance is the short-term 50% level at 96.315. If the upside momentum continues to build then the rally to extend into yesterday’s high at 96.455, followed by the short-term Fibonacci level at 96.540 and a downtrending Gann angle at 96.580.
A sustained move under 96.205 will signal the presence of sellers. The first target is an uptrending Gann angle at 96.115. This is a potential trigger point for an acceleration to the downside with the next target the main Fibonacci level at 95.850.
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