US Dollar Index (DX) Futures Technical Analysis – July 13, 2017 Forecast

September U.S. Dollar Index futures are trading flat shortly before the second and last day of testimony by Fed Chair Janet Yellen before the U.S. Senate Banking Committee. Yesterday, Yellen fueled a volatile reaction in the financial markets when she expressed concern over muted inflation levels.

Earlier today, the U.S. Producer Inflation report came in slightly better at 0.1%. The forecast was 0.0%. On Friday, the U.S. will release its latest report on consumer inflation. This is likely to be a market moving event. Therefore, we could see a tight range today unless Yellen makes a major statement.

Look for the index to rally if Yellen is hawkish. The market may be capped or even go down if Yellen reiterates yesterday’s dovish tone.

Technical Analysis

The main trend is down according to the daily swing chart. The trend will turn up on a trade through 95.96. Earlier in the session, sellers took out yesterday’s closing price reversal bottom, but the sell-off stopped at 95.245, slightly above the June 30 bottom at 95.225.

If the selling pressure is strong enough to take out 95.225 then look for a possible break into the September 22, 2016 main bottom at 94.97 over the near-term.

The main range is 95.225 to 96.255. Its retracement zone at 95.62 to 95.74 is the primary upside target. This area stopped the rally on Wednesday and earlier today. Sellers are coming in on a test of this area because the main trend is down. Overtaking this zone could launch a strong rally.

Forecast

Based on the current price at 95.505, the direction of the market today is likely to be determined by trader reaction to the steep downtrending angle at 95.46.

A sustained move under 95.46 will signal the presence of sellers. This could lead to a test of 95.245 and 95.225 then eventually 94.97.

A sustained move over 95.46 will indicate the presence of buyers. This could trigger an acceleration into a cluster of numbers at 95.62, 95.71 and 95.74.

The major resistance angles today are 95.84 and 95.88. The latter is also the trigger point for an acceleration to the upside.