US Dollar Index (DX) Futures Technical Analysis – March 8, 2018 Forecast

The U.S. Dollar Index is trading lower in response to a stronger Euro. Just a short while ago, the European Central Bank (ECB) announced it was leaving its cash rates unchanged and would continue its asset purchase program until September.

At 1325 GMT, March U.S. Dollar Index futures are trading 89.590, down 0.017 or -0.02%.

The ECB said that “the Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases,” which is set to last until September 2018.

At the ECB last monetary policy meeting in January, policymakers agreed that it was too early to make changes to the current level of stimulus, but admitted there could be changes in “early” 2018.

For now the quantitative easing program will continue at the pace of 30 billion Euros per month. The bank also said that stimulus could go beyond September if economic conditions change.

Daily Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the formation of the closing price reversal top on March 1.

On Wednesday, the index stopped at 89.33 before forming a closing price reversal bottom. The chart pattern was confirmed earlier today without much of a follow-through. A trade through 89.33 will negate the chart pattern and indicate the selling pressure is getting stronger.

The main range is 88.15 to 90.885. Its retracement zone at 89.52 to 89.195 is controlling the near-term direction of the market. This zone stopped the sell-off on Wednesday.

The short-term range is 90.885 to 89.33. Its 50% level at 90.11 and a major 50% level at 90.255 are the primary upside targets.

Daily Technical Forecast

Based on the current price at 89.585 and the earlier price action, the direction of the index the rest of the session is likely to be determined by trader reaction to the 50% level at 89.52.

A sustained move over 89.52 will indicate the presence of buyers. This is followed closely by a downtrending Gann angle at 89.64. This price is the trigger point for an acceleration into an uptrending Gann angle at 89.90.

Overtaking 89.90 will indicate the buying is getting stronger. This could trigger a rally into 90.11 then 90.255.

A sustained move under 89.52 will signal the presence of sellers. Prices could plunge under this level into 89.33, followed closely by 89.195. This is another trigger point for a break into an uptrending Gann angle at 89.03.