US Dollar Index (DX) Futures Technical Analysis – Look for Bullish Tone Over 94.815, Bearish Tone Under 94.80

December U.S. Dollar Index futures closed higher last week, helped by a series of events in the U.S. including the Federal Reserve’s monetary policy decision, the release of the Republicans’ tax reform plan and President Trump’s nomination of Fed Governor Jerome Powell as the new Fed Chair.

Traders also responded positively to Friday’s U.S. Non-Farm Payrolls report. Although the report missed the estimates, the revisions were friendly and there was nothing in the report to curtail the central bank’s plan to raise interest rates in December.

Weekly Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 95.06 will signal a resumption of the uptrend. The next major target is the top at 97.30 from the week-ending June 23.

The main range is 97.30 to 90.795. Its retracement zone is 94.05 to 94.815. After testing this zone the last two weeks, the index closed above it last week, putting the market in a bullish position.

Weekly Technical Forecast

Based on last week’s close at 94.86, the direction of the dollar index this week is likely to be determined by trader reaction to the resistance cluster at 94.80 to 94.815.

A sustained move over 94.815 will indicate the presence of buyers. Taking out the high at 95.06 could trigger an acceleration to the upside with the next target angle coming in at 96.05.

A sustained move under 94.80 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to extend into the 50% level at 94.05. This level held as support last week. If it fails to hold this week then look for a possible acceleration into the next uptrending Gann angle at 93.05.

Watch the price action at 94.80 to 94.815 all week. Look for a bullish tone to develop on a sustained move over 94.815 and for a bearish tone to develop on a sustained move under 94.80.