Advertisement
Advertisement

US Dollar Index (DX) Futures Technical Analysis – Daily Reversal Top Shifted Momentum to Downside

By:
James Hyerczyk
Published: May 14, 2018, 05:13 UTC

Based on Friday’s close at 92.41 and Monday’s early price action, the direction of the index today is likely to be determined by trader reaction to the 50% level at 92.30.

U.S. Dollar Index

The U.S. Dollar weakened against a basket of currencies on Friday as investors continued to take profits in reaction to a drop in Treasury yields and last week’s government report that showed softer-than-expected U.S. consumer inflation.

At 0445 GMT, June U.S. Dollar Index futures are trading 92.315, down 0.096 or -0.10%.

U.S. Dollar Index
Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum shifted to the downside late last week with the formation of a closing price reversal top on May 9 at 93.26 and the subsequent confirmation.

A trade through 93.26 will negate the closing price reversal top and signal a resumption of the downtrend. Typically, the counter-trend selling lasts 2 to 3 days. However, this one may last longer due to the size of the recent rally.

The index is currently trading inside a major retracement zone at 92.30 to 93.35. This zone is controlling the near-term direction of the index

The intermediate retracement zone is 91.90 to 91.12. This is the next downside target.

The short-term range is 88.945 to 93.260. If the selling pressure continues, we could see an eventual move into its retracement zone at 91.10 to 90.59. This zone is the primary downside target. Since the main trend is up, buyers are likely to come in on a test of this zone.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 92.41 and Monday’s early price action, the direction of the index today is likely to be determined by trader reaction to the 50% level at 92.30.

A sustained move over 92.30 will indicate the presence of buyers. This could provide short-term support and may trigger a retracement of the two day break from 93.26.

A sustained move under 92.30 will signal the presence of sellers. This could trigger a spike into 91.90. This level has to hold or we could see an acceleration to the downside later this week.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement