The USD Remains Strong

USD Falters, Dollar Index Futures Post Retracement

Posted Thursday, June 7, 2018 by
Shain Vernier • 1 min read

It has been a tough few days for the Greenback. The weekend buzz over the coming U.S. vs the world trade war has not yet subsided and the USD has felt the pain. Today’s session has brought more pressure, with the Buck posting losses against the Euro, British pound, and Swiss franc.

For Greenback bulls, today’s pressure is nothing new. Early June has been difficult, with values across the majors beginning to enter corrective territory. Even with next week’s FED meeting and rate hike rapidly approaching, a revaluation of the USD is underway.

A Look At The USD Index

June USD Index futures are trading at a critical technical level on the daily time frame. Values are off of late May highs and trending lower. In the event that the bears dominate Friday’s session, a test of the daily uptrend’s technical validity may come to fruition.

June USD Index Futures (DX), Daily Chart

Here are the levels to keep an eye on for the remainder of the trading day:

Support(1): Daily SMA, 93.320
Support(2): Bollinger MP, 93.310
Support(3): 38% Retracement, 92.675

Overview: Next week is set up to be a pivotal one for the Greenback. The markets are expecting a FED rate hike, with the CME FedWatch index showing a 91.0% chance of this happening next Wednesday.

Also, Monday’s meeting between Donald Trump and Kim Jong Un will heighten awareness toward commodity and safe-haven pricing. The USD will be fundamentally impacted by both events.

From a trading standpoint, the USD remains in a technical uptrend. The index has not dropped below the 38% retracement of the intermediate-term bullish move on the daily chart, 92.675. Although the recent sell-off of the Buck is significant, the prevailing uptrend is still technically valid.

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