US Dollar Index (DX) Futures Technical Analysis – Has Been Forming Support Base Since January 25

March U.S. Dollar Index futures are trading higher on Tuesday. Prices are being driven higher by rising interest rates. Short-covering ahead of the release of the Federal Open Market Committee meeting minutes from January is also helping to underpin the index.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 90.455 will change the main trend to up. A move through 88.150 will signal a resumption of the downtrend with the December 16, 2014 main bottom at 88.067 the next target.

The short-term range is 90.455 to 88.150. Its retracement zone at 89.30 to 89.57 is currently being tested. This zone is controlling the short-term direction of the index.

The intermediate range is 92.360 to 88.150. Its retracement zone at 90.26 to 90.75 is an upside target.

Daily Technical Forecast

Based on the current price action, the direction of the dollar index the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at 89.57.

A sustained move over 89.57 will indicate the buying is getting stronger. This could trigger a surge into the downtrending Gann angle at 89.96. This is followed by the intermediate 50% level at 90.26 and the main top at 90.455.

A sustained move under 89.57 will signal the presence of sellers. This could fuel a quick break into a 50% level at 89.30 and a steep uptrending Gann angle at 89.15.

We could see an acceleration to the downside if 89.15 is taken out with strong selling volume.