US Dollar Index (DX) Futures Technical Analysis – Downside Momentum Could Drive Index into 89.26

The March U.S. Dollar Index is trading lower early Wednesday. The index is being pressured by a stronger Euro which is threatening to challenge its recent high at 1.2323. Traders are buying the EUR/USD in anticipation of a hawkish monetary policy announcement on Thursday.

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. The only chart pattern that could stop the selling pressure is the weekly closing price reversal bottom. This makes last week’s close at 90.37, the key number to watch the rest of the week.

Weekly Technical Forecast

March U.S. Dollar Index futures are currently trading inside a major downtrending channel. The top of the channel is a weekly downtrending Gann angle at 90.83. The bottom of the channel is 89.26.

If the downside momentum continues then we could see a test of 89.26. Crossing to the weak side of this angle will put the index in an extremely bearish position with the December 16, 2014 main bottom at 88.07, the next major downside target.

Overcoming 90.83 will indicate the presence of buyers. This could fuel a strong short-covering rally with 92.01 a potential target.