U.S. Dollar Index Futures (DX) Technical Analysis – 99.165 Trigger Point for Acceleration to Upside

The U.S. Dollar surged against a basket of currencies on Monday with most of the move being fueled by a drop in the Euro. The single-currency fell to its lowest level in 28 months as concerns about Euro Zone growth weighed on the currency. The greenback is also being supported by seasonal demand and safe-haven buying attached to uncertainty over U.S.-China trade relations.

At 18:17 GMT, December U.S. Dollar Index futures are trading 99.085, up 0.324 or +0.33%.

The Euro was pressured by a report on Monday that showed German annual inflation unexpectedly slowed for the third consecutive month in September. Germany’s leading economic institutes also revised down their growth forecast for Europe’s biggest economy for this year, two sources with knowledge of their decision told Reuters on Monday.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed when buyers took out Friday’s closing price reversal top at 98.955. The main trend will change to up on a move through 97.560.

Daily Technical Forecast

Based on the early price action and the current price at 99.085, the direction of the December U.S. Dollar Index into the close on Monday is likely to be determined by trader reaction to the short-term uptrending Gann angle at 98.935.

Bullish Scenario

A sustained move over 98.935 will indicate the presence of buyers. In order to sustain the rally, buyers are going to have to claw through three uptrending Gann angles at 98.250, 98.975 and 99.165. The latter is a potential trigger point for an acceleration to the upside with the January 3, 2017 main top at 100.055, the next major upside target.

Bearish Scenario

A sustained move under 98.935 will signal the presence of sellers. It won’t change the trend to down, but it could trigger an acceleration to the downside with the next target angle coming in at 98.250.