US Dollar Index (DX) Futures Technical Analysis – December 7, 2016 Forecast

December U.S. Dollar Index futures are trading flat in limited action early Wednesday. Just like yesterday, the index is trading inside Monday’s wide range. This suggests investor indecision ahead of Thursday’s European Central Bank monetary policy committee meeting and interest rate announcement.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through 101.880 will turn the main trend to up. A move through 99.87 will signal a resumption of the downtrend.

The short-term range is 102.12 to 99.87. Its 50% level or pivot comes in at 100.995. This price is controlling the short-term direction of the market.

The main range is 95.905 to 102.12. Its retracement zone at 99.01 to 98.28 is the primary downside target.

Forecast

Based on the current price at 100.525 and the price action and investor sentiment the past two days, the index can move either way.

On the upside, the initial target is a potential resistance cluster at 100.91, 100.995 and 101.00. Since the trend is down, we could see sellers show up on a test of this area. Taking out 101.00, however, could trigger an acceleration to the upside with the next target angle coming in at 101.56. This angle is important because it stopped two rallies recently. It’s also the last potential resistance angle before the 101.880 and 102.120 main tops.

If buyers don’t come in to support the index then look for a sell-off. The chart indicates the market has room to break with the next target a downtrending angle at 100.91. This is followed by this week’s low at 99.87.

The daily chart opens up to the downside under 99.87 with the next targets a 50% level at 99.01, an uptrending angle at 98.41 and a Fibonacci level at 98.28.

Early indications suggest we’re going to have to read the momentum in order to determine the bias today.