US Dollar Index (DX) Futures Technical Analysis – May 27, 2016 Forecast

June U.S. Dollar index futures are trading slightly higher but in a tight and narrow range as investors await the release of the U.S. preliminary GDP report at 1230 GMT. Volume and volatility are expected to pick up with the release of the report.

The main trend is up according to the daily swing chart, but momentum appears to be shifting to the downside after this week’s failure to overtake a key retracement zone. The uptrend will resume on a trade through 95.67.

The market is in no danger of turning the main trend to down on the daily chart, but it could form a potentially bearish closing price reversal top on the weekly chart with a close under 95.34.

The main range is 98.70 to 91.88. Its retracement zone at 95.29 to 96.095 is currently providing resistance.

The short-term range is 91.88 to 95.67. Its retracement zone at 93.775 to 93.33 is the new primary downside target.

Based on yesterday’s close at 95.16 and the current price action, the direction of the market today is likely to be determined by trader reaction to the price cluster at 95.29 to 95.30.

Overtaking 95.30 will indicate the presence of buyers with the next targets coming in at 95.48 and 95.58. The latter is the last potential resistance angle before the 95.67 main top.

Taking out 95.67 will signal a resumption of the uptrend and could create enough upside momentum to challenge the Fibonacci level at 96.095.

A sustained move under 95.29 will signal the presence of sellers. The daily chart is open to the downside with the first key target a long-term downtrending angle at 94.83.

Crossing to the weak side of the angle at 94.83 opens up the index to a steep break with the next major target angle coming in at 94.13.

Watch the price action and read the order flow at 94.29 to 94.30 today. Trader reaction to this area should set the tone for the day.