U.S. Dollar Index Futures (DX) Technical Analysis – August 1, 2019 ForecastBased on the early price action and the current price at 98.61, the direction of the September U.S. Dollar Index on Thursday is likely to be determined by trader reaction to yesterday’s close at 98.330.
The U.S. Dollar is trading higher against a basket of currencies on Thursday, with most of the gains being generated by the weaker Euro. The strength in the U.S. Dollar is being fueled by slightly higher U.S. Treasury yields. The catalyst behind the move is tempered expectations for a September rate cut by the Federal Reserve.
The weakness in the Euro is being generated by expectations of further stimulus by the European Central Bank and perhaps a 10-basis point rate cut in September. The Dollar/Yen is being supported by a widening of the spread between U.S. Government bond yields and Japanese Government bond yields.
At 12:38 GMT, September U.S. Dollar Index futures are trading 98.610, up 0.280 or +0.28%.
We could see some volatility at 14:00 GMT with the release of the U.S. ISM Manufacturing PMI. It is expected to come in at 52.0. A lower than expected number could be bearish for the index. A stronger number is likely to drive the index higher.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through the intraday high at 98.700 will indicate the buying is getting stronger.
The market is in no position to change the trend to down, but it is in the window of time to form a potentially bearish closing price reversal top.
The minor trend is also up. A trade through 97.755 will change the minor trend to down. This will also shift momentum to the downside.
Daily Technical Forecast
Based on the early price action and the current price at 98.61, the direction of the September U.S. Dollar Index on Thursday is likely to be determined by trader reaction to yesterday’s close at 98.330.
A sustained move over 98.330 will indicate the presence of buyers. If this creates enough upside momentum then look for buyers to make a run at a pair of uptrending Gann angles at 98.740 and 98.820.
Overcoming 98.820 will put the index in an extremely bullish position. The next major upside target is the January 2017 main top at 100.060.
A sustained move under 98.330 will put the index in a position to form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day counter-trend break.