Thursday's Market Minute: U.S. Dollar Futures Finding Footing

U.S. Dollar futures held on above a potentially critical level this week after falling as much as -8% off the yearly highs near 114.74. The contract bottomed out and stabilized just a hair above the $105 level, which has been first a source of resistance in May and June and then transitioned into a source of support in August after price broke out to the upside.

These August lows could be the doorway to further downside if they are breached, but there’s another potentially supportive element in play near this level; the yearly -1 Standard Deviation Channel (used by traders to assess trend and gauge whether prices are at fair value or an extreme level) sits at about 106.50. Price also is in the thick of a volume node, which is an area of especially heavy trading according to the Volume Profile study and can act as support/resistance.

If price does break to the downside and slips below this key $105 level, look for bulls to step in at the 252-Day Exponential Moving Average, currently near 104.23. If the greenback starts to resume climbing upward, look for a resistance confluence of the old highs near 109 as well as the 21-Day EMA near the same point.

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