US Dollar Index (DX) Futures Technical Analysis – October 6, 2014 Forecast

December U.S. Dollar Index futures soared on Friday, following the release of better-than-expected U.S. jobs data. The results of the report pushed U.S. interest rates higher, making the dollar a more attractive investment.

According to the U.S. Labor Department, the economy added 248K new jobs. This was better than the estimate of 215K. The unemployment rate also fell below 6.0% for the first time since 2008. The news means the Fed is likely to move closer to announcing an interest rate hike.

Technically, there are not many price levels to look at. The major support is an uptrending angle on the daily chart at 85.83. This angle provided support twice last week on Thursday and Friday.

The best target on the upside is a long-term Fibonacci level at 87.31.

Because of the prolonged rally in terms of price and time, and the expanded range on Friday, traders should watch for profit-taking or a closing price reversal top. These aren’t likely to be trend changing events, but rather moves to alleviate some of the upside, overbought pressure.

Wednesday’s release of the latest Fed minutes will be the key economic news to watch this week along with central bank announcements by the Bank of Japan, the Reserve Bank of Australia and the Bank of England.