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James Hyerczyk
Daily December U.S. Dollar Index
Daily December U.S. Dollar Index

December U.S. Dollar Index futures are trading lower shortly before the regular session opening. Volume and volatility are light. They may pick up with the release of the U.S. building permits and housing starts reports at 8:30 a.m. ET, but the biggest reaction today is likely to come after the release of the latest Fed minutes at 2:00 p.m. ET.

The minutes may move the market today because it is expected to highlight the divergences between the hawkish U.S. Federal Reserve and the other dovish central banks including the European Central Bank, the Bank of England and the Reserve Bank of Australia.

Daily December U.S. Dollar Index

The main trend is up according to the daily swing chart, but the price action suggests upside momentum may be slowing. The direction of the market today is likely to be determined by trader reaction to two angles.

Look for a bullish tone to develop on a sustained move over 99.83 and a bearish tone to develop on a sustained move under 99.50.

A sustained move over 99.83 will signal the presence of buyers. The daily chart indicates there is plenty of room to the upside with 101.19, the April 13 top, the next potential upside target. If trades decide to follow a long-term uptrending angle then this price is likely to be hit around November 25 -26.

A sustained move under 99.50 will indicate the presence of sellers. This is also a trigger point for an acceleration to the downside with 99.00 the next potential target. This is followed closely by the major Fibonacci level at 98.78 and the main bottom at 98.50. A trade through this level will turn the main trend to down.

Look for a bullish bias to develop on a sustained move over 99.83 and a bearish bias on a sustained move under 99.50. 

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