US Dollar Index (DX) Futures Technical Analysis – September 20, 2017 Forecast

The December U.S. Dollar Index is trading lower early Wednesday, hovering slightly above a 2 ½ year low. Most traders are waiting for the Fed to release its decision on interest rates, its monetary policy decision and its economic projections. Fed Chair Janet Yellen is also expected to hold a press conference.

Traders believe the Fed will leave its benchmark interest rate unchanged. They also expect the central bank to reveal its plan to begin reducing its balance sheet. Traders will be listening to Yellen for clues as to whether the Fed is still on track to raise interest rates in December.

In other news, U.S. existing home sales came in at 5.35M, missing the 5.46M estimate.

Daily Technical Analysis

The main trend is down according to the daily swing chart. After a four-day counter-trend trade, the index topped at 94.42 on September 14, changing momentum back to down.

The major resistance is a retracement zone at 92.32 to 92.68.

The short-term range is 90.795 to 92.42. Its retracement zone is 91.61 to 91.42. This zone is very important because aggressive counter-trend buyers are trying to form a secondary higher bottom on a test of this zone.

Sellers are trying to drive the market through this zone in an effort to challenge the main bottom at 90.795.

Daily Forecast

With the index testing the short-term retracement zone, look for an upside bias on a sustained move over the short-term 50% level at 91.61 and for a downside bias on a sustained move under 91.42.

Overtaking 91.61 could drive the market into a short-term downtrending angle at 91.92. This is followed by a pair of downtrending angles at 92.11 and 92.28. This is followed by the major resistance zone at 92.32 to 92.68.

A sustained move under 92.42 will indicate the selling is getting stronger. This is followed by a series of uptrending resistance angles at 91.30, 91.05 and 90.92. The latter is the last potential support angle before the 90.795 main bottom.