U.S. Dollar Index Futures (DX) Technical Analysis – Friday’s Closing Price Reversal Bottom Hasn’t Been Confirmed

Based on the early price action, and the current price at 97.625, the direction of the December U.S. Dollar Index the rest of the session on Monday is likely to be determined by trader reaction to the downtrending Gann angle at 97.745.
James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is trading lower against a basket of currencies on Monday, following a massive short-covering rally on Friday that produced a closing price reversal bottom. The catalysts behind the reversal were stronger-than-expected U.S. Non-Farm Payrolls and consumer sentiment reports.

There has been no follow-through to the upside so the potentially bullish chart pattern hasn’t been confirmed. This is further proof that Friday’s move was fueled by short-covering. We may not get a follow-through either unless there is bullish news about the economy, a trade deal or the Fed is extremely hawkish on Wednesday.

At 09:26 GMT, December U.S. Dollar Index futures are trading 97.625, down 0.036 or -0.04%.

A strong Euro and British Pound are contributing to the dollar index weakness as well as demand for the safe-haven Japanese Yen and Swiss Franc.

Stocks are trading lower along with Treasury yields. These are early signs that there is risk in the market early Monday.

Daily December U.S. Dollar Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 97.200 will signal a resumption of the downtrend. A move through 98.495 will signal a resumption of the uptrend.

A trade through 97.815 will confirm the closing price reversal bottom. This will also shift momentum to the upside.

On the downside, the major support is a retracement zone at 97.140 to 96.630.

The short-term range is 98.495 to 97.200. Its retracement zone at 97.850 to 98.000 is the next upside target. Since the main trend is down, sellers could come in on a test of this zone.

The main range is 99.305 to 96.885. Its retracement zone at 98.110 to 98.390 is also resistance. It is controlling the longer-term direction of the market.

Daily Technical Forecast

Based on the early price action, and the current price at 97.625, the direction of the December U.S. Dollar Index the rest of the session on Monday is likely to be determined by trader reaction to the downtrending Gann angle at 97.745.

Bearish Scenario

A sustained move under 97.745 will indicate the presence of sellers. This could trigger a break into the uptrending Gann angle at 97.420, followed by Friday’s reversal bottom at 97.200.

Bullish Scenario

Taking out 97.745 will signal the presence of buyers. This could trigger a rally into the short-term 50% level at 97.850 and the short-term Fibonacci level at 98.000.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.