US Dollar Index (DX) Futures Technical Analysis – Likely Range Bound Until Friday’s U.S. CPI Report

September U.S. Dollar Index futures are trading slightly lower in limited price action, highlighted by low volume and low volatility. Trading is mixed against individual currencies with the dollar posting gains against the British Pound, Australian Dollar and New Zealand Dollar. It is trading lower against the New Zealand Dollar.

There were no significant reports on Monday, but investors will get the opportunity to react to comments from several Fed speakers this week including St. Louis Fed President James Bullard and Minneapolis Fed chief Neel Kashkari, on Monday.

Although I expect to see some reactions to this week’s reports, I don’t expect to see anything like the reaction to the jobs report until Friday’s release of the U.S. consumer inflation report. From now until the Fed meeting in September, reports on inflation will trigger the biggest responses from traders.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through 93.64 will take out Friday’s high, but the trend won’t change to up unless 94.115 is taken out. A trade through 92.39 will signal a resumption of the downtrend.

The main range is 95.96 to 92.39. If the trend changes to up then its retracement zone at 94.175 to 94.60 will become the primary upside target.

The intermediate range is 94.115 to 92.39. Its retracement zone is 93.25 to 93.46. The market closed inside this zone on Friday and spent most of the day inside it on Monday.

The new short-term range is 92.39 to 93.64. Its retracement zone at 93.01 to 92.87 is the primary downside target. This zone is important because buyers are going to try to form a potentially bullish secondary higher bottom. Sellers are going to try to drive the market through this area in an effort to make 93.64 a new main top.

Forecast

I don’t think we’re going to see a wide trading range like we saw at the end of last week until Friday. We’re probably likely to see a choppy, two-sided trade between the retracement zones at 93.25 to 93.46 and 93.01 and 92.87.