US Dollar Index (DX) Futures Technical Analysis – November 17, 2015 Forecast

December U.S. Dollar Index futures are trading higher shortly before the release of today’s U.S. consumer inflation report. Traders expect the report to show that inflation is strong enough to support an interest rate hike by the Fed in December.

The price action earlier in the session was strong enough to take out the swing top at 99.60. This reaffirmed the uptrend and made 98.50 a new main bottom.

The index is currently straddling a long-term uptrending angle at 99.58. Trader reaction to this angle will likely set the tone for the rest of the session.

A sustained move over 99.58 will signal the presence of buyers. This could create enough upside momentum over the near-term to eventually lead to a test of the April 13 main top at 101.19.

A sustained move under 99.58 will indicate the presence of sellers. It will also be an indication that the previous move through 99.60 was likely triggered by buy stops rather than aggressive buying.

If the selling persists through 99.58 then look for a move into the short-term angle at 99.25. This angle should provide support on the first test, but it is also the trigger point for an acceleration to the downside with the next target a major Fibonacci level at 98.78.

The main bottom is 98.50. A trade through this level will turn the main trend to down.

Watch the price action and read the order flow at 99.58 today. Trader reaction to this level will tell us whether the bulls or the bears are in control. Look for increased volatility with the release of the U.S. consumer inflation data at 8:30 a.m. ET.