US Dollar Index (DX) Futures Technical Analysis – October 16, 2014 Forecast

December U.S. Dollar Index futures posted an outside move and a lower close on Wednesday. The sell-off was triggered by weaker-than-expected U.S. economic data.

The main range is 82.45 to 86.87. The retracement zone created by this range at 84.66 to 84.14 was tested on Wednesday. Buyers came in when the market traded inside this zone to 84.525, creating a pretty solid technical bounce.

The main trend also turned down on the daily chart when the market crossed the last swing bottom at 85.015. Besides the retracement zone, it found support on a long-term uptrending angle at 84.70 today.

Joining the price cluster formed by the angle and the pivot at 84.70 and 84.66 was a downtrending angle at 84.62.

Crossing to the weak side of the downtrending angle at 84.62 will put the market in a bearish position. This could trigger a break into a Fibonacci level at 84.14. The daily chart opens up under this level with an uptrending angle at 83.58 the next likely target.

Holding over the uptrending angle at 84.70 could also trigger a rally into a downtrending angle from the 86.87 top at 85.75. Besides yesterday’s high at 86.13, additional resistance comes in at 86.31 and 86.59.

The tone of the market today will be determined by trader reaction to 84.62.