Tuesday, September 27, 2022

US Dollar Index Reaction 95.750 – 96.025 Sets the Tone

The US dollar traded better against a basket of major currencies on Monday, with traders expressing caution over rising tensions in Ukraine and a widely anticipated hawkish swing by the Federal Reserve on Wednesday.

At 10:31 GMT, March US Dollar Index futures are trading 95.750, up 0.114 or +0.12%. On Friday, the Invesco DB US Dollar Index Bullish Fund ETF closed $0.06 or -0.23% down at $25.62.

Two stories are expected to dominate financial market news this week and potentially set the greenback’s direction against its major peers. The first is the Fed policy announcement on Wednesday. The other is the Russia/Ukraine conflict, which is essentially a wildcard because we don’t know if or when an invasion will happen.

Most of the Fed’s monetary policy decisions are likely to be priced in, but they could surprise with even more scathing announcements. It would be helpful for the dollar. However, direct US involvement in the Ukraine/Russia conflict could trigger a massive flight-to-safety rally in the greenback.

Daily March US Dollar Index

daily swing chart technical analysis

The main trend is down as per the daily swing chart. However, the bullish trend has been maintained since January 14.

A trade through 96.475 would turn the main trend upward. A move above 94.610 would indicate a resumption of the downtrend.

A slight trend is also down. A trade through 95.850 would turn the minor trend upwards. This will confirm the change in speed.

The short-term range is from 96.895 to 94.610. The index is currently testing its retracement zone from 95.755 to 96.020.

The marginal range is 94.610 to 95.850. Its 50% level is support at 95.230.

The main range is 93.200 to 96.895. Its retracement zone from 95.050 to 94.610 is the key support. This zone closed the sale on January 14 at 94.610.

Daily Swing Chart Technical Forecast

The direction of March US Dollar Index on Monday is likely to be determined by the reaction of traders at 95.755.

Bullish outlook

A sustained move above 95.755 would indicate the presence of buyers. Taking 95.850 would indicate that buying is consolidating with the next target being 96.020.

A move through 96.025 could trigger an upward move with the next possible target being 96.475.

recession outlook

A sustained move below 95.750 would indicate the presence of sellers. If it creates enough downside momentum then look to move into 95.405 and then into 95.230.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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