The U.S. Dollar is edging lower against a basket of major currencies on Tuesday while trading inside yesterday’s range. The price action suggests investor indecision and impending volatility.
Based on the price action since Friday, investors are trying to decide whether the dollar is strong because of its safe-haven status or overpriced due to signs of a weakening U.S. economy.
On Friday, the dollar index sold off sharply after the release of disappointing U.S. manufacturing and services reports. Yesterday it closed higher, but showed little signs of safe-haven status as U.S. equity markets plunged.
Today’s price action is likely to be influenced heavily by the Conference Board’s Consumer Confidence report, due to be released at 15:00 GMT. It is expected to come in at 132.6, up slightly from the previously reported 131.6. This report is important because the consumer has been the main driver of the economy.
Some traders may discount the results because conditions have changed drastically since the survey was taken. It’s highly likely that the CB survey was taken when all investors had to worry about was China’s containment of the coronavirus. This report may not reflect the fact that the virus has now spread beyond China’s borders and has become a major threat to the global economy.
At 11:39 GMT, March U.S. Dollar Index futures are trading 99.235, down 0.049 or -0.05%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 99.815 will signal a resumption of the uptrend. The main trend will change to down on a trade through 97.165. This is highly unlikely, but there is room for a normal 50% to 61.8% correction of its last rally.
The minor trend is also up. A trade through 98.580 will change the minor trend to down and shift momentum to the downside.
The minor range is 98.580 to 99.815. The market is currently straddling its 50% level or pivot at 99.200.
The short-term range is 97.165 to 99.815. Its retracement zone at 98.490 to 98.180 is the primary downside target.
Daily Technical Forecast
Based on the early price action and the current price at 99.235, the direction of the March U.S. Dollar Index the rest of the session on Tuesday is likely to be determined by trader reaction to the pivot at 99.200.
A sustained move over 99.200 will indicate the presence of buyers. However, given the series of Gann angles on the upside, any rally is likely to be a labored event.
The index will strengthen on the bullish side of the uptrending Gann angle at 99.290, but then buyers face potential resistance at downtrending Gann angles coming in at 99.440, 99.630 and 99.720. The latter is the last potential resistance angle before the 99.815 main top.
A sustained move under 99.200 will signal the presence of sellers. Taking out yesterday’s low at 99.030 will indicate the selling is getting a little stronger.
The daily chart indicates there is plenty of room to the downside with targets coming in at 98.490, 98.395, 98.230 and 98.180. However, we don’t know at this time if the index will spike into these targets or plunge.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Gold Price Futures (GC) Technical Analysis – Needs to Overcome $1655.10 to Regain Strength
- E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – 27627 Major 50% Level; Watch for Bounce
- EUR/USD Price Forecast – Euro Rolling Over Again
- USD/JPY Price Forecast – US Dollar Choppy Against Japanese Yen
- AUD/USD Price Forecast – Australian Dollar Continues To Wilt
- S&P 500 Price Forecast – Stock Markets Continue to Get Hammered