US Dollar Index (DX) Futures Technical Analysis – Bullish Over 93.855, Bearish Under 93.565

December U.S. Dollar Index futures posted a two-sided trade on Wednesday before closing slightly higher for the session. The index was driven lower early in the session by a surge in the Euro. The greenback trimmed its losses against a basket of currencies after data showed a surprise rise in retail sales last month as well as an uptick in underlying inflation, essentially securing a Fed rate hike in December.

Daily Technical Analysis

The main trend is down according to the daily swing charge. It turned down on Tuesday when sellers took out the previous main bottom at 94.115. It was reaffirmed on Wednesday when sellers drove the market through the next main bottom at 93.365.

A trade through 93.035 will signal a resumption of the downtrend with the next targets a minor bottom at 92.91 and another main bottom at 92.635.

The index is being controlled by a number of retracement levels. The series of levels under the market likely means the next sell-off is going to be a labored event.

The main range is 92.635 to 95.07. Its retracement zone at 93.853 to 93.565 is currently being tested.

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

Daily Technical Forecast

Based on the early price action on Thursday, the direction of the index is likely to be determined by trader reaction to the main 50% level at 93.853.

A sustained move over 93.853 will indicate the presence of buyers. This could trigger a move into 94.188 to 94.396. Since the main trend is down, sellers are likely to come in on a test of this zone. They are going to try to form a secondary lower top.

A sustained move under 93.853 will signal the presence of sellers. This could trigger a fast break into the Fib level at 93.565. This price is a possible trigger point for a break into a series of levels at 93.143, 92.933, 92.688 and 92.428.

Basically, look for an upside bias to develop on a sustained move over 93.853 and for a downside bias to develop on a sustained move under 93.565.