U.S. Dollar Index Futures (DX) Technical Analysis – June 12, 2019 Forecast

The U.S. Dollar is trading nearly flat against a basket of currencies on Wednesday shortly before the U.S. opening. Causing the price action is the mixed trade against the major currencies. The Euro is inching lower after giving up earlier gains that took out last week’s high. The British Pound continues to edge higher, putting it in a position to take out last week’s high. The Canadian Dollar is trading lower and may be ripe for a short-term correction after hitting its highest level since March 1 earlier in the week. The safe-haven Japanese Yen and Swiss Franc are trading higher and lower respectively.

At 10:35 GMT, June U.S. Dollar Index futures are trading 96.620, down 0.025 or -0.02%.

The Euro reversed to the downside after trading higher earlier in the session in reaction to comments from European Central Bank President Mario Draghi. In a speech, Draghi offered no insight on ECB policies, but he did show concerns that the European economies may be weaker because of the global trade war.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 96.405 will signal a resumption of the downtrend. The main trend will change to up on a move through 97.390.

There hasn’t been much action this week with the index holding inside Friday’s wide range. This indicates investor indecision and impending volatility.

The main range is 95.170 to 98.260. The index is currently trading inside its retracement zone at 97.715 to 96.350. This zone is controlling the near-term direction of the dollar index

Daily Technical Forecast

Based on the early price action and the current price at 96.620, the direction of the June U.S. Dollar Index is likely to be determined by trader reaction to the 50% level at 96.715 and the downtrending Gann angle at 96.510.

Bullish Scenario

Taking out and sustaining a rally over 96.715 will indicate the return of buyers. If this move generates enough upside momentum, the index could make a run at the uptrending Gann angle at 97.014. This is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 96.715 will signal the presence of sellers, but crossing to the weak side of the downtrending Gann angle at 96.510 will put the index in a bearish position. This could trigger further selling into last week’s low at 96.405, a main bottom at 96.365 and the Fibonacci level at 96.350.

Taking out 96.350 could trigger an acceleration to the downside with the next target angle coming in at 96.092.

Market Moving Event

The catalyst behind the price action today is likely to be the U.S. consumer inflation report, due at 12:30 GMT. The CPI is expected to come in at 0.1%. Core CPI is forecast at 0.2%. Softer-than-expected data could pressure the U.S. Dollar against the other currencies because it will give the Fed another reason to trim its benchmark interest rate later in the year.