US Dollar Index (DX) Futures Technical Analysis – July 17, 2017 Forecast

September U.S. Dollar Index futures are trading nearly flat shortly ahead of the regular session opening. Sellers tried to drive the market lower but this move was stopped shortly below last week low at 94.845. This move suggests bearish investors may be reluctant to short weakness at current price levels.

Technical Analysis

The main trend is down according to the daily swing chart. Currently, the index is straddling the former main bottom at 94.97. Overcoming this level could trigger a short-covering rally. It will also trap traders who went short last Friday on the break through this level.

The price action also suggests that buyers may be trying to form a potentially bullish closing price reversal bottom. This makes Friday’s close at 94.93 an important level to watch.

If the selling continues then the next downside target becomes 94.555.

Forecast

Based on the current price at 94.94, the direction of the index today is likely to be determined by trader reaction to the combination of the downtrending angle at 94.96 and the former bottom at 94.97.

A sustained move over 94.97 will indicate the presence of buyers. The daily chart indicates the market has plenty of room to the upside with the downtrending angle at 95.46 the next potential upside target.

A sustained move under 94.96 will signal the presence of sellers. If this generates enough downside momentum, we could see an eventual break into the next major bottom at 94.555.

Basically, on an intraday basis, look for an upside bias on a sustained move over 94.97 and a downside bias to develop on a sustained move under 94.96.

On a closing basis, a close above 94.93 will form a closing price reversal bottom, indicating the buying may be greater than the selling at current price levels.