Yahoo Finance U.S. Dollar Index Futures (DX) Technical Analysis – Should Rally Until Euro Reverses to Upside
The U.S. Dollar continued to strengthen against a basket of currencies on Thursday. This time the rally was fueled by stronger-than-expected economic data. Helping to boost the dollar was another steep drop in the Japanese yen, which plunged for a second day as investors began to question its status as a safe-haven asset due to concerns over its economy.
Earlier this week, a Japanese government report showed that GDP had weakened. With the coronavirus expected to impact the Japanese economy during the first quarter, traders are starting to bet on the start of a recession in the world’s third largest economy.
At 18:51 GMT, March U.S. Dollar Index futures are trading 99.735, up 0.138 or +0.14%.
In U.S. economic news, the number of Americans filing for unemployment benefits rose modestly last week. The data suggested sustained labor market strength that could help to support the economy amid risks from the coronavirus and weak business investment.
In another report on Thursday, the Philadelphia Fed said its business conditions index jumped to a reading of 36.7 in February, the highest since February 2017, from 17.0 in January.
Daily Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out yesterday’s high.
The main trend will change to down on a trade through 97.165. This is highly unlikely. However, due to the prolonged move up in terms of price and time, the index is inside the window of time for a potentially bearish closing price reversal top.
Daily Technical Forecast
Based on the early price action and the current price at 99.735, the direction of the March U.S. Dollar Index into the close is likely to be determined by trader reaction to yesterday’s close at 99.597.
A close under 99.597 will form a closing price reversal top. This won’t change the main trend to down, but if confirmed, it could trigger the start of a 2 to 3 day correction.
This article was originally posted on FX Empire
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