Advertisement
Advertisement

US Dollar Index (DX) Futures Technical Analysis – Move Under 92.75 Could Trigger Steep Sell-off

By:
James Hyerczyk
Published: Dec 24, 2017, 00:52 UTC

Based on the current chart pattern, it looks as if any rally is likely to be labored because of a number resistance levels. The daily chart indicates there is plenty of room to the downside on a sustained move under 92.78.

U.S. Dollar Index

March U.S. Dollar Index futures settled slightly higher on Friday. Volume was well-below average ahead of the long holiday week-end. We may continue to see this type of trading until after the New Year’s holiday.

The price action was primarily driven by the Euro, which makes up about 57 percent of the index. The Euro weakened against the dollar after Catalan separatists won a regional election, stoking concerns about the possible break-up of the Euro Zone’s fourth-largest economy.

The Greenback was also supported by the news that the U.S. Senate approved a bill to fund the federal government through January 19 and avert agency shutdowns ahead of a Friday midnight deadline.

U.S. Dollar Index
Daily March U.S. Dollar Index

Daily Swing Chart Analysis

The main trend is down according to the daily swing chart. It turned down on Wednesday when sellers took out the main bottom at 92.860. The new main top is 93.555.

Despite the change in trend to down, the price action is actually being dictated by a number of retracement levels.

The main range is 92.13 to 93.825. Its retracement zone at 92.978 to 92.777 is currently being tested. It appears to be acting like support with the lower or Fibonacci level at 92.777 providing support on Wednesday when the index reached its low for the week at 92.750.

Another main range is 92.265 to 93.825. Its retracement zone is 93.045 to 92.861. The market settled inside this zone.

The short-term range is 93.555 to 92.750. Its retracement zone at 93.153 to 93.247 is the initial upside target.

The intermediate range is 93.825 to 92.750. Its retracement zone is another upside target at 93.288 to 93.414.

Based on the current chart pattern, it looks as if any rally is likely to be labored because of the number resistance levels.

The daily chart does indicate there is plenty of room to the downside on a sustained move under 92.777. If volume rises on a move through 92.750 then we could see an eventual break into 92.265 to 92.130.

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.

Did you find this article useful?

Advertisement