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US Dollar Index (DX) Futures Technical Analysis – February 10, 2016 Forecast

By:
James Hyerczyk
Published: Feb 10, 2016, 11:42 UTC

March U.S. Dollar Index futures are called better shortly before the regular session opening and Fed Chair Janet Yellen’s testimony before Congress.

Weekly March U.S. Dollar Index

March U.S. Dollar Index futures are called better shortly before the regular session opening and Fed Chair Janet Yellen’s testimony before Congress. Yellen’s comments are likely to move the U.S. Dollar so traders should be prepared for better-than-average volatility following the release of her comments at 8:30 a.m. ET and the start of her testimony at 10:00 a.m. ET. Investors want to know if the Fed is still on track to raise interest rates in 2016 given the weakening global economy and the current market volatility.

Weekly March U.S. Dollar Index
Weekly March U.S. Dollar Index

Technically, the main trend is down according to the daily and weekly swing charts.

On the weekly chart, the main range is 93.125 to 100.70. Its retracement zone is 96.91 to 96.02. This zone is currently being tested. Earlier in the session, sellers took out the lower end of the zone at 96.02. The move ended at 95.88.

Based on the current price at 96.13, the key support levels to watch are the long-term uptrending angle at 96.13. This is followed by the major Fib level at 96.02 and the intra-day low at 95.88.

Taking out the intraday low at 95.88 could drive the market into a steep downtrending angle at 95.70. Crossing to the weak side of this angle will put the index in an extremely weak position. This could trigger an eventual move into the next uptrending angle that comes in at 94.63 today.

A sustained move over 96.13 will signal the presence of buyers. This may create enough upside momentum to challenge the next potential resistance level at 96.92.

Overtaking the main 50% level at 96.92 could trigger a breakout to the upside with the next major target a downtrending angle at 98.20.

Watch the price action and read the order flow at 96.02 today. Trader reaction to this Fib level will tell us if the bulls are coming in to control the market or if the bears are increasing the selling pressure.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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