U.S. Dollar Index Futures (DX) Technical Analysis – July 31, 2019 Forecast

The U.S. Dollar is trading flat against a basket of currencies on Wednesday, shortly before the release of the Federal Reserve’s interest rate decision and monetary policy statement. The Fed is expected to cut its benchmark interest rate 25-basis points. However, traders will be listening to Fed Chair Jerome Powell at his post-meeting press conference for any clues about future rate cuts. A dovish Fed will be bearish for the U.S. Dollar, a hawkish Fed will be bullish for the greenback.

At 14:52 GMT, September U.S. Dollar Index futures are trading 97.850, up 0.020 or +0.02%.

The quarter-point rate cut is not likely to move the dollar much since it’s been priced in for weeks. Future rates cuts will likely move the greenback. Currently, the markets are pricing three cuts by year-end, according to the CME’s Fedwatch tool.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 97.960 will signal a resumption of the uptrend. The main trend will change to down on a trade through 96.320. This is highly unlikely, but the index is inside the window of time for a closing price reversal top.

The minor trend is also up. A trade through 97.220 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 97.220 to 97.960. Its 50% level or pivot at 97.590 is controlling the direction of the index today.

The main range is 96.320 to 97.960. Its retracement zone at 97.140 to 96.950 is the second downside target.

Daily Technical Forecast

Holding above the pivot at 97.590 will give the index an upside bias, while taking out 97.960 will indicate the buying is getting stronger. It’s pretty remote, but the next upside target is a resistance cluster at 98.570. Overtaking this area will put the index in an extremely bullish position.

On the downside, a failure to hold 97.590 will indicate the selling is getting stronger. This could trigger a break into an uptrending Gann angle at 97.445. Buyers could come in on the first test of this angle. If it fails then look for the selling to possibly extend into 97.22 to 97.14.

The best support area is 97.14 to 96.950. Inside this zone is an uptrending Gann angle at 96.990.