U.S. Dollar Index Futures (DX) Technical Analysis – August 6, 2019 Forecast

The U.S. Dollar is trading higher against a basket of currencies on Tuesday after a move by Chinese authorities drove down demand for risky assets, helping to make the greenback a more attractive asset. The primary drivers of the rally in the dollar index are dramatic reversal tops in the Japanese Yen, Swiss Franc and Euro.

At 14:09 GMT, September U.S. Dollar Index futures are trading 97.515, up 0.175 or +0.17%.

Overnight, Chinese authorities helped support the Yuan, which eased concerns over a currency war between the United States and China.

Daily Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at 98.700 on August 1.

The main trend will change to down on a trade through 96.320. A move through 98.700 will negate the closing price reversal and signal a resumption of the uptrend.

The main range is 95.365 to 98.700. Its retracement zone at 97.030 to 96.640 is support. This zone stopped the selling earlier today at 96.980.

The short-term range is 96.320 to 98.700. Its retracement zone at 97.510 to 97.230 is currently being tested. Overtaking this zone will indicate the buying is getting stronger.

Daily Technical Forecast

Based on the early price action and the current price at 97.515, the direction of the September U.S. Dollar Index the rest of the session is likely to be determined by trader reaction to the short-term 50% level at 97.510.

Bullish Scenario

A sustained move over 97.510 will indicate the buying is getting stronger. If this creates enough upside momentum then look for the rally to possibly extend into a pair of Gann angles at 97.945 to 97.950.

Bearish Scenario

A sustained move under 97.510 will signal the presence of sellers. This could trigger a break into a series of levels including a support cluster at 97.240 to 97.230, followed by an uptrending Gann angle at 97.135 and the main retracement zone at 97.030 to 96.640.