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U.S. Dollar Index Futures (DX) Technical Analysis – June 26, 2019 Forecast

By:
James Hyerczyk
Published: Jun 26, 2019, 10:08 UTC

Based on the early price action and the current price at 95.670, the direction of the September U.S. Dollar Index futures contract on Wednesday is likely to be determined by trader reaction to a pair of Gann angles at 95.770 and 95.765.

US Economy

The U.S. Dollar is trading slightly higher against a basket of currencies on Wednesday, but inside yesterday’s range. The price action suggests investor indecision and impending volatility.

On Tuesday, the index formed a potentially bullish closing price reversal bottom. The catalyst behind the chart pattern was somewhat hawkish comments from Federal Reserve Chairman Jerome Powell. He shook up the markets yesterday when he failed to specifically say the Fed would be cutting rates in late July. This surprised traders who had priced in a 100% rate cut.

These traders need to learn that reading is a skill because last week, the Fed chair and his policymakers never said in their monetary policy statement the central bank would be cutting rates. Furthermore, Powell reiterated that the decision to cut rates would be data dependent, and this seemed to upside the short-sellers.

Powell created uncertain, giving short sellers an excuse to book profits and this reversed the index higher.

At 09:47 GMT, September U.S. Dollar Index futures are trading 95.750, up 0.070 or +0.08%.

U.S. Dollar Index
Daily Sept U.S. Dollar Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, yesterday’s closing price reversal bottom suggests momentum may be shifting to the upside.

A trade through 95.875 will confirm the closing price reversal bottom. This will also shift momentum to the upside. This could lead to a 2 to 3 day counter-trend rally with 96.315 to 96.540 the next likely upside target.

Taking out 95.365 will negate the closing price reversal bottom and signal a resumption of the uptrend.

The main range is 94.696 to 97.715. Its retracement zone at 95.850 to 96.205 is the first upside target zone, 96.315 to 96.540 is the next.

Daily Technical Forecast

Based on the early price action and the current price at 95.670, the direction of the September U.S. Dollar Index futures contract on Wednesday is likely to be determined by trader reaction to a pair of Gann angles at 95.770 and 95.765.

Bullish Scenario

A sustained move over 95.770 will indicate the presence of buyers. The first target is the main Fibonacci level at 95.850. This is followed closely by yesterday’s high at 95.875.

Taking out 95.875 will confirm the reversal bottom. This could trigger an acceleration to the upside with the next target a resistance cluster at 96.205 to 96.215.

Bearish Scenario

A sustained move under 95.765 will signal the presence of sellers. This could trigger a break into 95.620, followed by 95.365.

Overview

If yesterday’s closing price reversal bottom represents an actual shift in investor sentiment then look for a breakout over 95.875. It would help if the EUR/USD followed through to the downside, following its closing price reversal top on Tuesday.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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