US Dollar Index (DX) Futures Technical Analysis – August 2, 2017 Forecast

September U.S. Dollar Index futures are trading higher shortly before the regular session opening. There is a little divergence between the index and the Euro. The Euro posted a new higher-high, but the dollar index held Monday’s low. This may be an early sign that buyers are defending the U.S. Dollar at current price levels.

Look for volatility at 1215 GMT with the release of the latest ADP Non-Farm Employment Change report. It is expected to show the private sector added 187K jobs in July. A bearish number should send the dollar index lower. A stronger than expected report is likely to trigger a short-covering rally.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through 92.635 will signal a resumption of the selling with the June 23, 2016 main bottom at 92.555 the next likely target. This bottom is the trigger point for a possible acceleration to the downside with the next target the May 3, 2016 main bottom at 91.45.

Due to the prolonged move down in terms of price and time, the index is in the window of time for a potentially bullish closing price reversal bottom. This will not mean the trend is changing to up, but it could lead to a 2 to 3 day correction.

The main trend will turn up on a move through 94.115.

Forecast

Holding 92.635 will indicate the presence of buyers. If the ADP report is bullish then look for a surge into the downtrending angle at 93.49. We could see a technical bounce on the first test of this angle. But if it fails to stop the rally then look for the rally to extend into a pair of angles at 93.80 and 93.96. These angles are followed by the main top at 94.115.

A break through 92.555 will be bearish, but the selling has to be strong enough to sustain the move. If it’s not and traders regain 93.72, a potentially bullish closing price reversal bottom could form.