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US Dollar Index (DX) Futures Technical Analysis – May 10, 2018 Forecast

By:
James Hyerczyk
Published: May 10, 2018, 11:28 UTC

The main trend is up according to the daily swing chart, but yesterday’s closing price reversal top may be signaling a shift in momentum to the downside.

U.S. Dollar Index

June U.S. Dollar Index futures are trading lower shortly before the release of the U.S. consumer inflation report for April, due for release at 1230 GMT.

The dollar is being pressured by a stronger Euro and Japanese Yen. Higher crude oil prices are helping to boost demand for the commodity-linked Canadian and Australian Dollars.

Today’s consumer inflation report is expected to show that annual Core CPI inflation rose to 2.2 percent last month, which would be the highest in more than a year, from 2.1 percent in March.

On a month-to-month basis, CPI is expected to come in at 0.3%, up from -0.1% and Core CPI is expected to show a rise of 0.2%, the same as the previous month.

A stronger-than-expected CPI report could drive up Treasury yields and the U.S. Dollar.

Traders will also get the opportunity to react to Weekly Unemployment Claims which are expected to come in at 219K, up from 211K.

U.S. Dollar Index
Daily June U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart, but yesterday’s closing price reversal top may be signaling a shift in momentum to the downside.

A trade through 93.26 will negate the chart pattern and signal a resumption of the uptrend.

A move through 92.695 will confirm the closing price reversal top. This could trigger the start of a 2 to 3 day correction.

The index also crossed to the weak side of a steep uptrending angle that had been guiding it higher since April 17. This is also a sign of a shift in momentum. This angle comes in at 93.20. The index will have to overcome this angle to put it in a strong position again.

Daily Technical Forecast

A trade through 93.26 could drive the index into a major Fibonacci level at 93.35, followed by the December 12 main top at 93.48. This is a possible trigger point for a spike into the November 14 main top at 93.87.

A trade through 92.695 could create enough downside momentum to drive the index into the 50% level at 92.30. If this doesn’t hold then look for the selling to extend into the Fib level at 91.90.

The Fib at 91.90 is the trigger point for an acceleration to the downside with an eventual move into 91.13.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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