US Dollar Index (DX) Futures Technical Analysis – July 5, 2017 Forecast

September U.S. Dollar Index futures are trading higher after an early setback. Investors are preparing for the release of the latest minutes from the Fed’s June monetary policy meeting. The minutes are expected to show the Fed supports another rate hike later this year. However, investors are hoping the central bank reveals details about its plan to trim its balance sheet.

Technical Analysis

The main trend is down according to the daily swing chart. However, after a three day rally, it’s in a position to complete a 50% to 61.8% retracement of its recent sell-off.

A trade through 95.225 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The main range is 97.515 to 95.225. Its retracement zone at 96.37 to 96.64 is the primary upside target. Since the main trend is down, we expect to see sellers show up on the first test of this retracement zone.

Forecast

Based on the current price at 96.135 and the earlier price action, the direction of the index is likely to be determined by trader reaction to the downtrending angle at 96.14.

A sustained move over 96.14 will signal the presence of buyers. This could create the upside momentum needed to challenge the 50% level at 96.37. Watch for a technical bounce on the first test of this level.

Overcoming 96.37 could trigger a further rally into the Fibonacci level at 96.64, followed by the downtrending angle at 96.83.

A break back below 96.14 will indicate the presence of sellers. This could lead to a quick test of the uptrending angle at 95.98.

Look for a possible acceleration to the downside if 95.98 fails as support. The next target angle comes in at 95.60.

Basically, look for an upside bias to develop on a sustained move over 96.14 and for a downside bias to develop on a sustained move under 95.98.