U.S. Dollar Index Futures (DX) Technical Analysis – June 19, 2019 Forecast

Based on the early price action, the direction of the September U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at 97.120. The dollar index could weaken if the Fed comes across as excessively dovish. This means it signals rate cuts in July, September and December. Skipping the July rate cut could be read as hawkish and this could drive the dollar higher against a basket of currencies.
James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is trading slightly better against a basket of currencies early Wednesday, but inside yesterday’s range as most of the major players take to the sidelines ahead of the release of the Fed’s interest rate and monetary policy decisions at 18:00 GMT.

Traders are saying there is a 20% chance of a rate cut. However, the focus will be on the Fed’s monetary policy statement and whether central bank policymakers open the door to further rate cuts later this year. Going into the announcements, traders are pricing in at least three cuts by the Fed this year.

The dollar index could weaken if the Fed comes across as excessively dovish. This means it signals rate cuts in July, September and December. Skipping the July rate cut could be read as hawkish and this could drive the dollar higher against a basket of currencies.

Even before the Fed announcements, the direction of the U.S. Dollar could be influenced by consumer inflation reports out of the UK and Canada. Furthermore, ECB President is also scheduled to speak at 1400 GMT. He moved the index on Tuesday with dovish commentary.

At 06:01 GMT, September U.S. Dollar Index futures are trading 97.170, up 0.017 or +0.02%.

Daily Sept U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 97.265 will signal a resumption of the uptrend. The next two targets are tops at 97.625 and 97.715.

On the downside, the main trend changes to down on a trade through 95.890. The index is also up eight sessions from its last main bottom. This puts it inside the window of time for a potentially bearish closing price reversal top.

The main range is 97.715 to 95.890. Its retracement zone at 97.020 to 96.800 is controlling the direction of the index. Holding above this support zone is helping to generate an upside bias.

If 95.890 to 97.265 becomes a main range then its 50% level at 96.580 will become the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the September U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at 97.120.

Bullish Scenario

A sustained move over 97.120 will indicate the presence of buyers. The first upside target is yesterday’s high at 97.265. Taking out this level could drive the index into a downtrending Gann angle at 97.420.

Taking out 97.420 will indicate the buying is getting stronger with the next potential target angle coming in at 97.565. This is the last potential resistance angle before the 97.625 and 97.715 main tops.

Bearish Scenario

A sustained move under 97.120 will signal the presence of sellers. The first target is the main Fibonacci level at 97.020. This is followed closely by an uptrending Gann angle at 96.890. This angle has been guiding the market higher since June 7.

If 96.890 fails as support then look for a break into the main 50% level at 96.800. This is a potential trigger point for an acceleration into 96.530 and 96.390.

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