US Dollar Index (DX) Futures Technical Analysis – August 11, 2015 Forecast

September U.S. Dollar Index futures broke sharply on Monday after a Fed member hinted that the central bank is unlikely to hike rates in September unless consumer inflation begins to pick up. Currently, it is well below the Fed target of 2%.

Overnight, the index weakened slightly after the People’s Bank of China devalued the Yuan against the U.S. Dollar. There may have been a muted reaction to the move in the pre-market session, but this event may linger all week so be prepared for volatility.

The main trend is up according to the daily swing chart, but momentum has been to the downside since the release of the U.S. Non-Farm Payrolls report on Friday.

Today’s regular session is likely to begin on the weak side of a major 50% level at 97.46. This level is the first potential resistance. Any rally over this level is likely to be labored because of several downtrending and uptrending angles in front of the next major Fibonacci resistance at 98.44.

Downtrending angles come in at 97.43, 97.93, 98.18 and 98.30. Uptrending angles come in at 98.05 and 98.31. The best target inside the 97.46 to 98.44 retracement zone is 98.30 to 98.31.

On the downside, the first target is an uptrending angle at 96.93. The daily chart opens up to the downside with the next target a main bottom at 96.36. A trade through this bottom will turn the main trend to down on the daily chart. This is followed by another uptrending angle at 96.24 and a 50% level at 95.86.

Simply speaking, look for a bullish tone to develop on a sustained move over 97.46 and a bearish tone on a sustained move under 96.93.