US Dollar Index (DX) Futures Technical Analysis – November 5, 2015 Forecast

December U.S. Dollar Index futures are trading better shortly before the cash market opening. The market is currently testing the last major angle before the 98.74 main top. The price action indicates that investors are increasing their bets for a bullish U.S. Non-Farm Payrolls report on Friday.

The main trend is up according to the daily swing chart. Because of the prolonged move up in terms of price and time, however, investors should watch for a potentially bearish closing price reversal top. This chart pattern will not mean the trend is getting ready to turn lower, but it will likely mean that investors are lightening up their long positions ahead of the jobs report.

Based on yesterday’s close at 98.03, the first upside target is a downtrending angle at 98.24. During the pre-market session, sellers came in on the initial test of this angle. It is also a trigger point for an upside breakout with the August 7 main top at 98.74 the next likely target.

On the downside, the key targets are a downtrending angle at 98.24 and an uptrending angle at 97.74. Breaking 98.24 will be a sign of weakness, but a sustained move under 97.74 will indicate the presence of sellers.

Taking out 97.74 will also indicate a shift in investor sentiment and trader momentum. This could trigger the start of a steep sell-off since the next major target doesn’t come in until 96.00.

Look for a bullish tone to develop on a sustained move over 98.24 and a bearish tone on a sustained move under 97.58.