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U.S. Dollar Index Futures (DX) Technical Analysis – September 3, 2019 Forecast

Based on the earlier higher-high, the direction of the September U.S. Dollar Index the rest of the session is likely to be determined by trader reaction to Monday’s close at 98.860.
James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is trading higher against a basket of currencies early Tuesday, primarily helped by another plunge in the Euro and British Pound. The greenback is also being boosted by a weaker Canadian Dollar and lower demand for the safe-haven Japanese Yen and Swiss Franc. Geopolitical turmoil related to Brexit continues to weaken the Fiber and Sterling, while optimism over U.S.-China trade relations are pressuring the Yen and Franc.

At 05:16 GMT, September U.S. Dollar Index futures are trading at 99.230, up 0.370 or +0.37%.

On Monday, the British Pound posted its biggest decline in more than three weeks and is now trading near a more than two-year low on Tuesday on growing investor worries about a “no-deal Brexit” as rival British lawmakers fought for control over negotiations to leave the European Union, according to CNBC.

CNBC also said the Euro is being pressured by weak economic data from the European Union, which is underscoring expectations for the European Central Bank (ECB) to ease monetary policy at a meeting on September 12. The ECB is expected to be aggressive with a rate cut accompanied by some form of quantitative easing.

Daily September U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out Monday’s high. The main trend will change to down on a trade through 97.370. This is highly unlikely today, but the index is up six days from its last main bottom, which means we should start watching for a closing price reversal top.

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Daily Technical Forecast

Based on the earlier higher-high, the direction of the September U.S. Dollar Index the rest of the session is likely to be determined by trader reaction to Monday’s close at 98.860.

Bullish Scenario

A sustained move over 98.860 will indicate the presence of buyers. If this continues to generate enough upside momentum then we could see a test of the January 3, 2017 main top at 100.055 on September 10.

Bearish Scenario

A sustained move under 98.860 will signal the presence of sellers. This will also put the index in a position to form a closing price reversal top. This won’t indicate a change in trend, but it could lead to a 2 to 3 day counter-trend correction.

The first downside target is the steep uptrending Gann angle at 98.870. This angle, moving up at a rate of .250 per day from the 97.370 main bottom, has been guiding the index higher since August 26. This angle is also support so watch for buyers on the first test. If it fails then look for a potential acceleration to the downside.

Also pay close attention to the Euro since it exerts the most influence on the index.

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