U.S. Dollar Index Futures (DX) Technical Analysis – Straddling RT Zone at 97.51 to 97.230 for Six Sessions

Based on today’s price action and the current price at 97.255, the direction of the September U.S. Dollar Index into the close is likely to be determined by trader reaction to the intermediate Fibonacci level at 97.230.
James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is trading lower against a basket of currencies late Monday after posting an earlier two-sided trade. The market has been rangebound for four days since forming a potentially bullish closing price reversal bottom at 96.980 on August 6. The key level capping the index is 97.565. This was the high on August 6 and August 8. Today’s intraday high is 97.550.

At 19:49 GMT, September U.S. Dollar Index futures are trading 97.255, down 0.067 or -0.07%.

The loss is being spread across all of the currencies in the index with the Euro exerting the most pressure since it carries the most weight. The Euro is up 0.12%. The British Pound is up 0.44%. The Canadian Dollar is trading up by 0.17%. The Swiss Franc is up 0.28% and the Japanese Yen is trading 0.36% higher.

The Australian and New Zealand Dollars are trading lower against the U.S. Dollar, but they aren’t members of the index. They are considered commodity currencies. The Japanese Yen is being supported by safe-haven buying. So is the Swiss Franc, but the Swiss National Bank intervened to push its currency lower.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top at 98.700 on August 1. A minor closing price reversal bottom at 96.980 on August 6 has temporarily stopped the selling pressure.

A trade through 98.700 will signal a resumption of the uptrend. The main trend will change to down on a trade through 96.320.

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

The intermediate range is 96.320 to 98.700. The market has been straddling its retracement zone at 97.510 to 97.230 for six sessions.

The short-term range is 98.700 to 96.980. Its retracement zone at 97.840 to 98.045 is a potential upside target.

Daily Swing Chart Technical Forecast

Based on today’s price action and the current price at 97.255, the direction of the September U.S. Dollar Index into the close is likely to be determined by trader reaction to the intermediate Fibonacci level at 97.230.

Bearish Scenario

A sustained move under 97.230 will signal the presence of sellers. This could drive the index into the main 50% level at 97.035, followed closely by the reversal bottom at 96.980. This level is a potential trigger point for an acceleration to the downside with the main Fibonacci level at 96.640 the next potential downside target.

Bullish Scenario

A sustained move over 97.230 will signal the presence of buyers. If this generates enough upside momentum then look for a potential rally into the intermediate 50% level at 97.510. Overtaking this level will indicate the buying is getting stronger, however, buyers need to take out 97.565 with heavy volume in order to trigger a potential upside breakout into the short-term retracement zone at 97.840 to 98.045.

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