US Dollar Index (DX) Futures Technical Analysis – April 4, 2018 Forecast

June U.S. Dollar Index futures are trading lower shortly after the U.S. opening. The index broke sharply earlier in the session after China announced new tariffs on U.S. goods. However, it has clawed back much of that loss. The price action suggests investor indecision and impending volatility.

The dollar fell early as some traders bet the Trump administration’s tariffs on Chinese goods and Beijing’s response would hurt the Greenback while others felt the situation could be diffused shortly.

It looks like the direction of the index will be determined by trader appetite for risk. If investors decide to dump stocks then this should send investors into the safety of the Japanese Yen. This could put pressure on the dollar. However, a trade war with China would also pressure export currencies like the Australian and New Zealand Dollars. This could help limit the U.S. Dollar’s losses.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the closing price reversal bottom at 88.53.

A trade through 90.025 will change the main trend to up. This could trigger an acceleration to the upside with the main top at 90.49 the next major upside target.

The minor trend is up. A trade through 89.41 will change the minor trend to down.

The main range is 90.49 to 88.53. Its retracement zone is 89.51 to 89.74. This zone is controlling the direction of the index. Currently, the index is straddling its upper or Fibonacci level at 89.74.

The short-term range is 88.530 to 89.945. If there is a break then its retracement zone at 89.24 to 89.07 will become the primary downside target. This zone is straddling a major 50% level at 89.16.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the index today will be determined by trader reaction to the Fibonacci level at 89.74.

A sustained move over 89.74 will indicate the presence of buyers. This could lead to a test of 89.945 then 90.025. This is the trigger point for an acceleration to the upside.

A sustained move under 89.74 will signal the presence of sellers. This could trigger a break into the 50% level at 89.51 then the minor bottom at 89.41. This price is a potential trigger point for an acceleration into a series of potential retracement levels at 89.24, 89.16 and 89.07.