U.S. Dollar Index Futures (DX) Technical Analysis – August 26, 2019 Forecast

The U.S. Dollar is trading higher against a basket of currencies on Monday after a positive tweet by President Trump triggered a series of reversals in several currencies. Much of the rally is being fueled by weakness in the safe-haven Japanese Yen and Swiss Franc after both currencies posted solid gains on Friday in response to an escalation in the U.S.-China trade war.

At 09:14 GMT, September U.S. Dollar Index futures are trading 97.860, up 0.340 or +0.35%.

President Trump said on Monday that China is ready to come back to the negotiating table and the two countries will start talking very seriously. Speaking at the G-7 summit in Biarritz in France, Trump praised Chinese President Xi Jinping and welcomed his desire for a deal and for calm.

The index could accelerate to the upside later today if China confirms Trump’s comments.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside on Friday with the formation of a potentially bearish closing price reversal top.

A trade through 94.455 will negate the closing price reversal top and signal the resumption of the uptrend with the next target the main top at 98.700.

A move through the intraday low at 97.370 will indicate the return of sellers. A move through 96.980 will change the main trend to down.

The main range is 96.320 to 98.700. Its retracement zone at 97.510 to 97.230 is support. This zone stopped the selling earlier today at 97.370.

The short-term range is 98.700 to 96.980. Its retracement zone at 97.840 to 98.045 is the first upside target and potential resistance.

Daily Technical Forecast

Based on the early price action, the direction of the September U.S. Dollar Index the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at 97.840 and the uptrending Gann angle at 97.855.

Bullish Scenario

A sustained move over 97.855 will indicate the buying is getting stronger. This could trigger a further rally into a series of potential resistance levels at 98.010, 98.045, 98.110 and 98.170.

The daily chart starts to open up to the upside on a move over 98.170. This could lead to a test of 98.435 to 94.455.

Bearish Scenario

A sustained move under 97.840 will signal the return of sellers. This could trigger a hard break into 97.64, followed by the main 50% level at 97.510. The next key targets are an uptrending Gann angle at 97.420, today’s low at 97.370 and the main 50% level at 97.230.