U.S. Dollar Index (DX) Futures Technical Analysis – Taking Out 92.765 Could Trigger Short-Covering Rally
The U.S. Dollar closed lower against a basket of major currencies in a choppy, two-sided trade on Tuesday, just barely missing forming a potentially bullish closing price reversal bottom.
The price action reflected a number of factors including end-of-the-month position-squaring, low volume ahead of Friday’s U.S. August Non-Farm Payrolls report and volatile reactions to mixed economic data.
On Tuesday, September U.S. Dollar Index futures settled at 92.635, down 0.017 or -0.02%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 92.395 will signal a resumption of the downtrend. A move through 93.195 will change the main trend to up.
Wednesday’s session starts with the index down eight sessions since the major top on August 20. This puts the index inside the window of time for a potentially bullish closing price reversal bottom.
The short-term range is 91.780 to 93.750. The index is currently trading inside its retracement zone at 92.765 to 92.535.
The minor range is 93.750 to 92.395. Its retracement zone at 93.070 to 93.230 is the nearest upside target.
Daily Swing Chart Technical Forecast
The direction of the September U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to 92.580.
A sustained move under 92.580 will indicate the presence of sellers. This could lead to a quick test of the Fibonacci level at 92.535. If this level fails then look for the selling to possibly extend into this week’s low at 92.395. Taking out this level could trigger an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with 91.780 the next potential downside target.
A sustained move over 92.580 will signal the presence of buyers. The first upside target is 92.765. This level is a potential trigger point for an acceleration to the upside with 93.070 the next likely target.