US Dollar Index (DX) Futures Technical Analysis – Bullish Over 93.63, Bearish Under 93.48

September U.S. Dollar Index futures are trading flat early Thursday. Volume is extremely low this week due to the lack of fresh economic data and summer vacations. The major players are also on the sidelines ahead of this week’s central bankers’ symposium at Jackson Hole, Wyoming. Investors are hoping for some guidance from European Central Bank President Mario and U.S. Federal Reserve Chair Janet Yellen.

The index rallied on Tuesday, boosted by speculation that the White House and Republicans are making progress on tax legislation or on at least a repatriation plan that would involve infrastructure spending. The key story came from Politico which reported the Trump administration and key lawmakers had found common ground on how to approach tax reform.

The benchmark 10-year Treasury note yield rose more than 2 basis points to 2.2 percent, while the two-year yield advanced to trade at 1.329 percent. Rising Treasury yields helped make the U.S. Dollar a more attractive investment.

Technical Analysis

The main trend is up according to the daily swing chart. However, the index is trapped in a range, giving it a more sideways look. This could be an indication of investor indecision as well as a function of below average volume.

A trade through 94.055 will signal a resumption of the uptrend. A move through 92.830 will change the main trend to down.

The short-term range is 94.055 to 92.92. Its retracement zone at 93.49 to 93.62 is acting like resistance.

The main range is 94.115 to 92.390. Its 50% level or pivot is 93.253. Holding above this level will help with the upside bias.

Forecast

Based on the current price at 93.45 and the earlier price action, the direction of the dollar index the rest of the session is likely to be determined by trader reaction to the short-term 50% level at 93.49.

A sustained move over 93.49 will signal the presence of buyers. This could generate a quick move into the short-term Fibonacci level at 93.62. This price is also the trigger point for an acceleration to the upside with the next major targets coming in at 94.055, 94.115 and 94.175.

A sustained move under 93.49 will indicate the presence of sellers. The next target is the major 50% level at 93.25. Crossing to the weak side of this level will shift momentum to down. This could create the downside momentum needed to challenge 92.92 then the 92.83 bottom.