US Dollar Index (DX) Futures Technical Analysis – Breakout Over 93.64 Confirms Last Week’s Reversal Bottom

September U.S. Dollar Index futures posted a potentially bullish closing price reversal bottom last week. A surprisingly strong U.S. Non-Farm Payrolls report coupled with an oversold market helped fuel the short-covering rally that led to the lower-low, higher-close chart pattern.

Technical Analysis

The main trend is down according to the weekly swing chart. The trend will turn up on a trade through 97.515. However, the closing price reversal bottom signals a shift in momentum to up.

A trade through 93.64 will confirm the closing price reversal bottom. A move through 92.39 will negate the closing price reversal bottom and signal a resumption of the downtrend.

If 92.39 fails as support then look for the selling to continue into the May 3, 2016 main bottom at 91.45.

The short-term range is 97.515 to 92.39. If the closing price reversal bottom is confirmed then its retracement zone at 94.95 to 95.56 will become the primary upside target.

Forecast

Based on Friday’s close at 93.46, the direction of the market this week will be determined by trader reaction to last week’s high at 93.64.

Taking out 93.64 will confirm the closing price reversal bottom. This could trigger an acceleration into a steep downtrending angle at 94.02. Overtaking the angle at 94.02 and sustaining the rally could lead to an eventual test of the retracement zone at 94.95 to 95.56.

A failure to overcome 93.64 or sustain a rally through this level will signal the presence of sellers. This could lead to a break back to last week’s low at 92.39. If this fails then we’re likely to see an eventual move into 91.45.

There is another move we could see. Last week’s range was 93.64 to 92.39. Its 50% level or mid-point is 93.02. We could see a pullback into this level. If the move attracts buyers then this could launch another attempt to breakout to the upside.