US Dollar Index (DX) Futures Technical Analysis – March 20, 2017 Forecast

June U.S. Dollar Index futures are trading lower shortly before the regular session opening. The market opened lower in reaction to the G-20 events over the week-end, but the selling pressure subsided early in the session, triggering an intraday short-covering rally.

Technical Analysis

The main trend is down according to the daily swing chart. Today is the seventh day down from the 102.125 main top which puts the index in the window of time for a potentially bullish closing price reversal bottom.

The main range is 99.145 to 102.190. Its retracement zone is 100.67 to 100.31. Trading below this zone is giving the index a downside bias. Recapturing the lower or Fibonacci level at 100.31 will mean the buying is getting stronger. Overcoming the upper or 50% level will change the bias to up.

Forecast

Based on the current price at 100.085, the direction of the dollar index is likely to be determined by trader reaction to the uptrending angle at 100.15.

The inability to overcome the angle at 100.15 will signal the presence of sellers. This could generate enough downside momentum to trigger a break into the next uptrending angle at 99.65. This is the last potential support angle before the 99.145 main bottom.

Overcoming 100.15 will indicate the presence of buyers. This could create the upside momentum needed to fuel a rally into the major Fibonacci level at 100.31, followed by the steep downtrending angle at 100.38.

Since the main trend is down, we could see selling on a test of 100.31 to 100.38. Look for an acceleration to the upside if 100.38 is taken out with better-than-average volume.

Watch the price action and read the order flow at 100.15. Trader reaction to this angle will tell us if the bulls are regaining control, or if the sellers are maintaining control.