U.S. Dollar Index Futures (DX) Technical Analysis – Needs Weaker Euro to Sustain Rally into 98.70

Based on Friday’s price action and the close at 98.007, the direction of the September U.S. Dollar Index on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at 98.045.
James Hyerczyk
U.S. Dollar Index

The U.S. Dollar finished marginally higher against a basket of currencies on Friday after touching its highest level since August 2, nonetheless, the market still managed to post a solid gain for the week. Helping to boost the greenback were firmer U.S. Treasury yields and a weaker Euro. The dollar was supported by a stronger-than-expected buildings permits report. Meanwhile, the Euro was pressured by reports saying the European Central Bank (ECB) was planning an aggressive attempt to jumpstart the economy.

On Friday, September U.S. Dollar Index futures settled at 98.007, up 0.002 or +0.00%.

Besides the weaker Euro, the index was boosted by weaker demand for the safe-haven Japanese Yen and Swiss Franc. Both currencies fell as worries over a U.S. recession eased. The greenback was pressured by a strong British Pound and Canadian Dollar.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The index closed within striking distance of its last main top at 98.700. A trade through this level will negate a closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 96.980.

The short-term range is 98.700 to 96.980. Its retracement zone is 98.045 to 97.840. On Friday, the buying wasn’t strong enough to sustain a rally over this zone and the index settled inside it.

The intermediate range is 96.320 to 98.700. Its retracement zone at 97.510 to 97.230 is support.

The main range is 95.365 to 98.700. Its retracement zone at 97.035 to 96.640 is controlling the near-term direction of the index. It stopped the selling at 96.980 on August 6.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 98.007, the direction of the September U.S. Dollar Index on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at 98.045.

Bullish Scenario

A sustained move over 98.045 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the main top at 98.700 over the near-term. A weaker Euro and Japanese Yen will help support the dollar the most.

Bearish Scenario

A sustained move under 98.045 will signal the presence of sellers. The first target is the short-term 50% level at 97.840. Since the trend is up, buyers could come in on the first test of this level. If it fails then look for a potential acceleration into the intermediate 50% level at 97.510.

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.