USD Index Non-Committal To Begin The Week - Forex News by FX Leaders
USD Index

USD Index Non-Committal To Begin The Week

Posted Tuesday, March 31, 2020 by
Shain Vernier • 2 min read

Today marks the final trading session of March, a historic month in the world of finance. The COVID-19 pandemic has shaken the global economy to its core and produced unprecedented volatility. We have seen some of the largest pricing moves of the past decade ― will the action continue into April? In the case of the USD Index, rates have entered rotation within a non-committal technical area.

At this point, it’s anyone’s guess how the markets will respond to the COVID-19 shock over the coming months. However, we are beginning to see signs of normality. The CBOE’s Volatility Index (VIX) is returning to mean levels, showing a relatively modest reading of 51.50 today. By comparison, the last several weeks have regularly seen values in the mid-80s. Although there is still plenty of action on Wall Street for equities, things appear to be getting back to business as usual.

Let’s take a look at the daily technicals for the USD Index and see which way the Greenback may be headed.

USD Index Enters Rotational Phase

All in all, it’s been a strong month for June USD Index futures. Bidders have entered the market aggressively and treated the Greenback like a safe-haven. However, the dynamic is beginning to shift as rates are back below 100.000.

June USD Index Futures (DX), Daily Chart
June USD Index Futures (DX), Daily Chart

Here are the key levels to watch in this market for the near future:

  • Support(1): Bollinger MP, 99.400
  • Support(2): 62% Current Wave, 98.130
  • Support(3): Daily SMA, 97.665

Overview: As we move into April, a bullish bias continues to be warranted for the USD Index. Rates remain above the 62% retracement level, which indicates the daily uptrend remains valid. While the strength of the bullish trend has diminished, it is still intact. If we see a surprise figure out of tomorrow’s ISM Manufacturing PMI (March), then June USD Index futures may be primed for a directional move.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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