U.S. Dollar Index (DX) Futures Technical Analysis – Counter-Trend Sellers May Be Eyeing 92.510 – 92.200 Target

The U.S. Dollar finished lower against a basket of major currencies on Thursday ahead of Friday‘s bank holiday and the release of the U.S. Non-Farm Payrolls report. The data is expected to show an increase in job creation and a lower unemployment rate for March, highlighting a steady recovery from the pandemic in the world’s largest economy.

On Thursday, the June U.S. Dollar Index settled at 92.947, down 0.289 or -0.31%.

U.S. Non-Farm Payrolls, due at 12:30 GMT, are forecast to have jumped by 647,000 in March from 379,000 in February. The unemployment rate is expected to fall to 6.0% from 6.2%.

The main trend is up according to the daily swing chart, but momentum shifted to the downside, following the confirmation of the previous sessions closing price reversal top.

A trade through 93.470 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 91.290.

The nearest support is a pair of Fibonacci levels at 92.510 and 92.200. On the upside, the closest resistance is the November 2, 2020 main top at 94.085.

A closing price reversal top is not a change in trend. Often, it is formed to just to alleviate some of the upside pressure. In this case, it was probably formed by position-squaring ahead of the long holiday weekend.

If the downside pressure continues then look for the selling to extend into 92.510 to 92.200.

The short-term rally is 91.290 to 93.470. Its 50% level at 92.380 is the most likely downside target. This price falls inside the 92.510 to 92.200 range. Since the main trend is up, buyers are likely to show up on a test of this area.

On the upside, taking out 93.470 could trigger an acceleration to the upside with 94.085 the next target.

Aggressive counter-trend sellers may want to play the short side for a correction into 92.510 to 92.200. Trend traders face a normal correction into this area, while new buyers may find it attractive for a fresh entry.