US Dollar Index (DX) Futures Technical Analysis – October 8, 2014 Forecast

Sellers did not hit the December U.S. Dollar Index as hard as expected when the futures contract took out the major support angle from the August 28 bottom at 82.45. Sellers were able to drive the market into 85.645, however, the selling pressure stopped slightly above the October 2 bottom at 85.545.

Bearish traders could come in again today, looking for the point on the charts that will trigger an acceleration to the downside.

The failure to overcome the uptrending angle at 86.08 will indicate selling pressure. If momentum turns to the downside then look for a possible acceleration to the downside through 85.545.

The daily chart indicates there is plenty of room to break with the first target, a 50% level, coming in at 84.66. This is followed by an uptrending angle at 84.26 and a Fibonacci level at 84.14.

On the upside, overtaking the main angle at 86.08 will indicate that buyers have returned. The short-term range is 86.87 to 85.645. This makes its pivot at 86.26 a key upside target. If the pivot stops a rally then this will indicate that sellers are defending the top. If the pivot is overtaken then look for a possible test of the contract high at 86.87 over the near-term.

The tone of the day will be determined by trader reaction to 86.08. A trigger point for a possible acceleration to the upside is 86.27 and to the downside 85.53.