US Dollar Index (DX) Futures Technical Analysis – Bullish Over 93.85, Bearish Under 93.56

U.S Dollar investors seem to have a lot on their hands lately with tax reform issues at the forefront. Treasury yields have been under pressure and demand for higher-yielding assets has been declining. However, the economic data has been good enough to sustain expectations for a December rate hike. Additionally, several Federal Open Market Committee members have expressed their support for a rate increase. The main driver of the selling pressure has been the Euro which represents about 57% of the index.

The main trend is down according to the daily swing chart. A trade through 93.305 will indicate a resumption of the downtrend. This could lead to moves into the minor bottom at 92.91 and the main bottom at 92.635.

Taking out 93.915 will change the minor trend to up, but the main trend will remain down until there is enough buying to take out 95.07.

The main range is 92.635 to 95.07. Its retracement zone at 93.853 to 93.565 is currently being tested. Trader reaction to this zone will likely determine the near-term direction of the index.

The short-term range is 95.07 to 93.305. Its retracement zone at 94.188 to 94.396 is the primary upside target.

A sustained move under 93.565 will signal the presence of sellers. This could generate the downside momentum needed to challenge last week’s low at 93.305, followed by 50% levels at 93.143 and 92.933.

A sustained move over 93.565 will indicate the presence of buyers. This is followed by the 50% level at 93.853. This price is a possible trigger point for an acceleration into 94.188 then 94.396.