US Dollar Index (DX) Futures Technical Analysis – 92.80 Pivot Controlling Weekly Direction

September U.S. Dollar Index futures are trading lower in limited price action. Today is a bank holiday in the U.S. so we don’t expect much movement. Traders had a chance to move the index in reaction to North Korea’s nuclear weapons test over the week-end, but the volume wasn’t there.

Some of the selling was an extended reaction to Friday’s U.S. Non-Farm Payrolls report. Some was related to position-squaring ahead of Tuesday’s Reserve Bank of Australia interest rate decision and Thursday’s European Central Bank interest rate decision and President Mario Draghi’s press conference.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. However, last week’s closing price reversal bottom may be an indication that momentum is getting ready to shift to the upside. A trade through 93.305 will confirm the chart pattern. Taking out 91.55 will signal a resumption of the downtrend and negate the chart pattern. This would put the index in a position to test the May 3, 2016 main bottom at 91.45.

The main trend will change to up on the weekly chart on a trade through 94.055.

The short-term range is 94.055 to 91.550. Its 50% level or pivot is 92.80. This price is controlling the short-term direction of the market.

The main range is 97.515 to 91.55. If a rally gains traction then look for the move to extend into the retracement zone at 94.53 to 95.24.

Forecast

Based on Friday’s close at 92.769, the direction of the U.S. Dollar Index this week is likely to be determined by trader reaction to the 50% level at 92.80.

A sustained move under 92.80 will indicate the presence of sellers. Crossing to the weak side of a downtrending angle at 92.56 will indicate the selling is getting stronger. This could drive the index into 92.02. Crossing to the weak side of this angle will put the index in a position to challenge 91.55, followed closely by 91.45.

A sustained move over 92.80 will signal the presence of buyers. This could trigger a move into a downtrending angle at 93.31. This is the last potential resistance angle before the 94.055 main top.

Taking out 94.055 will change the main trend to up with the next potential upside targets coming in at 94.533 and 94.77.

Watch the price action and read the order flow at 92.80 all week.