US Dollar Index (DX) Futures Technical Analysis – April 26, 2018 Forecast

The dollar is trading lower against a basket of currencies on Thursday, mostly in reaction to the short-covering rally taking place in the Euro. The European Central Bank left interest rates unchanged as expected, but the price action today will likely be dictated by what ECB President Mario Draghi has to say about the strength of the Euro Zone economy and the timing of any changes in monetary policy.

At 1153 GMT, the June U.S. Dollar Index futures contract is trading 90.875, down 0.078 or -0.09%.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, the market is up 7 days from its last bottom, putting in the “window of time” for a closing price reversal top. This may not lead to a change in trend, but it could fuel a 2 to 3 day correction.

Earlier today, the market posted a higher-high, continuing the uptrend, but the market ran into sellers as the index neared a major 50% level at 91.125. The index turned lower on the move, putting it in a position to form a potentially bearish closing price reversal top.

The major resistance today is a long-term 50% level at 91.125. Today’s intraday high is 91.12.

If 88.945 to 91.120 forms a range then its retracement zone at 90.035 to 89.775 will become the primary downside target.

Daily Technical Forecast

Based on the current price at 90.875 and the earlier price action, the direction of the index the rest of the session is likely to be determined by trader reaction to the uptrending Gann angle at 91.16 and the major 50% level at 91.125.

A sustained move under 91.125 will indicate the presence of sellers. This could trigger a break into a potential support cluster at 91.74 to 91.70. Since the main trend is up, we could see a technical bounce on the first test of this area.

Look for a possible acceleration to the downside if sellers take out 91.70. The daily chart indicates there is plenty of room to the downside with 90.03 the next likely target.

A sustained move over the Gann angle at 91.16 will signal the presence of buyers. This is a potential trigger point for an acceleration to the upside with 91.90 the next major upside target.