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US Dollar Index (DX) Futures Technical Analysis – December 8, 2016 Forecast

By:
James Hyerczyk
Published: Dec 8, 2016, 12:19 UTC

December U.S. Dollar Index futures are trading lower shortly before the release of the European Central Bank’s monetary policy decision. This decision is

us-dollar-index

December U.S. Dollar Index futures are trading lower shortly before the release of the European Central Bank’s monetary policy decision. This decision is likely to create a volatile reaction. The price action suggests investors are expecting the central bank to announce additional stimulus, tapering and even setting the date for the end of quantitative easing.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through 99.87 will signal a resumption of the downtrend. The trend will change to up on a move through 101.880. This is followed by the multi-year high at 102.120.

The short-term range is 102.120 to 99.87. Its 50% level or pivot is 100.995. This is the primary upside target.

The main range is 95.905 to 102.12. If the selling pressure continues then look for a minimum break into its retracement zone at 99.013 to 98.279. An uptrending angle at 98.530 passes through this zone, making it a valid downside target also. Watch for a technical bounce on the first test of this zone. It is essentially controlling the longer-term direction of the market.

daily-december-u-s-dollar-index
Daily December U.S. Dollar Index

Forecast

Based on the current price at 100.020, the firs downside target is the low at 99.870. Crossing to the weak side of the downtrending angle at 99.620 will put the dollar index in a bearish position. This could create enough downside momentum to challenge the 50% level at 99.013. This is followed by the uptrending angle at 98.530 and a Fibonacci level at 98.279.

The Fib level at 98.279 is the trigger point for an acceleration to the downside with the next target angle coming in at 97.218.

On the upside, the first target angle drops in at 100.870. This is followed by a cluster of number at 100.995, 101.495 and 101.155. Crossing to the strong side of the downtrending angle at 101.155 will put the dollar index in a bullish position.

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.

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