US Dollar Index (DX) Futures Technical Analysis – November 3, 2015 Forecast

December U.S. Dollar Index futures finished slightly lower on Monday in limited price action. The inside move indicates investor indecision. This could be expected before the Reserve Bank of Australia’s meeting on Tuesday, the Bank of England meeting on Thursday and Friday’s U.S. Non-Farm Payrolls report. In between these events are a series of Fed member speeches and testimony by Fed Chair Janet Yellen.

Technically, the main trend is up according to the daily swing chart. However, momentum has shifted to the downside. Overbought conditions and uncertainty about the timing of the Fed rate hike are likely the catalysts behind the recent weakness.

Based on yesterday’s close at 97.00, the first target on the upside is an uptrending angle at 97.08. The first target on the downside is a downtrending angle at 96.80. Trader reaction to these two angles will determine the direction of the market today.

A sustained move over 97.08 will signal the presence of buyers. The next major upside target is a long-term downtrending angle at 97.77. I don’t expect the index to reach this level today since volume and volatility are expected to remain below average most of this week.

A sustained move under 96.80 will indicate the presence of sellers. The daily chart is wide open to the downside under this angle, but once again, below average volume and volatility are likely to prevent a wash-out to the downside.

With 93.83 to 97.895 the new short-term range, if sellers do begin to take control then its retracement zone at 95.86 to 95.38 will become the primary downside target.

Watch the price action at 97.08 and 96.80. Look for a bullish tone to develop on a sustained move over 97.08 and a bearish tone to develop on a sustained move under 96.80.