US Dollar Index (DX) Futures Technical Analysis – Strong US Economic Data Supports Aggressive Fed


FXEmpire.com –

The U.S. dollar is trading higher against a basket of major currencies on Thursday night, but after hitting a 20-year high earlier in the session.

The greenback’s strength was fueled by the release of US economic data showing a strong and resilient economy, giving the Federal Reserve the green light to aggressively raise interest rates to curb inflation.

As of 18:12 GMT, September US Dollar Index futures are trading at 109.585, up 0.920 or +0.85%. The Invesco DB US Dollar Index Bullish Fund ETF (UUP) is at $29.36, up $0.25 or +0.84%.

After a lackluster open, the dollar strengthened after a government report showed that the number of Americans filing new claims for unemployment benefits fell further last week, in line with strong demand for workers and tight labor market conditions.

Furthermore, data from the Institute for Supply Management (ISM) has shown that manufacturing in the United States rose steadily in August as employment and new orders rebounded, while further easing price pressures bolstered expectations that inflation has likely peaked.


September US Dollar Daily Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed after buyers broke through Monday’s high at 109.445. A trade through 107.480 will change the main downtrend.

The minor trend is also up. A trade through 108.235 will change the minor downtrend.

The minor range is 107.480 to 109.980. The closest support is a 50% level at 108.730. The main support is the long-term Fibonacci level at 107.780.

Daily Swing Chart Technical Forecast

Traders’ reaction to the pivot at 108.730 will determine the direction of the US Dollar Index from September through Thursday’s close.

Bullish scenario

A sustained move above 108.730 will indicate the presence of buyers. If that creates enough momentum late in the session, buyers can take a shot at 109.980. This is a potential trigger point for an upward acceleration.

Downside scenario

A sustained move below 108.730 will signal the presence of sellers. This could trigger a further decline into the minor low at 108.235, followed by the main Fibonacci level at 107.780.

Secondary notes

Due to the extended bullish movement in price and time, a close below 108.665 will form a potentially bearish closing price reversal top. For an overview of all of today’s economic events, check out our economic calendar.

This article was originally published on FX Empire

More from FXEMPIRE:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Previous European markets open at close, data, news, earnings
Next Stocks rebound on better economic data – Manila Bulletin