US Dollar Index (DX) Futures Technical Analysis – Sellers Could Drive Index Into 92.45 to 92.32

December U.S. Dollar Index futures closed lower on Wednesday. The selling pressure was a combination of the reaction to the Fed minutes, President Trump’s tax reform plan and escalating tensions over North Korea.

In regards to the minutes, dollar traders may be expressing concerns over the split Fed policymakers and their worries over the next rate hike and low inflation although the Fed Funds futures contract indicates about a 90 percent chance of a rate hike.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top last Friday.

Based on the current chart pattern, the index is rapidly approaching a series of retracement levels. All of which could attract buyers since the main trend is up.

The main range is 91.215 to 94.100. Its retracement zone at 92.66 to 92.32 is the next down side target.

Another main range is 90.795 to 94.100. Its retracement zone is 92.45 to 92.06.

Combining the two retracement zones makes 92.45 to 92.32 the best downside target. Since the main trend is up, we could see buyers step in on a test of this area.