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James Hyerczyk
U.S. Dollar Index

The U.S. Dollar is trading lower against a basket of currencies at the mid-session on Thursday. The selling actually began on Wednesday after the Federal Reserve cut interest rate 25-basis points and hinted that it would take a pause in policy. In a press conference after the Fed’s policy announcement, however, Chief Jerome Powell said he would not raise interest rates until inflation was higher. Some traders read this as dovish, driving the Dollar lower against major currencies.

At 16:39 GMT, December U.S. Dollar Index futures are trading 97.140, down 0.299 or -0.31%.

Daily December U.S. Dollar Index

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 96.885 will signal the resumption of the downtrend. A move through 97.800 will change the main trend to up.

The short-term range is 96.885 to 97.800. Its 50% level or pivot at 97.345 is resistance.

The major support zone is 97.140 to 96.630. This zone stopped the selling on October 21 on 96.885. On Thursday, the dollar index is straddling the upper or 50% level at 97.140. This zone is controlling the near-term direction of the index.


Daily Technical Forecast

Based on the early price action and the current price at 97.140, the direction of the December U.S. Dollar Index the rest of the session on Thursday is likely to be determined by trader reaction to a 50% level at 97.140 and an uptrending Gann angle at 97.135.

Bullish Scenario

A sustained move over 97.140 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the minor 50% level at 97.345. This is followed by an uptrending Gann angle at 97.385. Overcoming this angle will put the dollar index in a bullish position.

Bearish Scenario

A sustained move under 97.135 will signal the presence of sellers. The next target angle comes in at 97.010. This is the last potential support angle before the 96.885 main bottom. If 96.885 fails as support then look for the index to eventually extend into the main Fibonacci level at 96.630.

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