Advertisement
Advertisement

US Dollar Index (DX) Futures Technical Analysis – September 21, 2017 Forecast

By:
James Hyerczyk
Published: Sep 21, 2017, 13:03 UTC

December U.S. Dollar Index futures are trading slightly better after yesterday’s sharp rise. The market is trading inside yesterday’s range which

US Dollar Index

December U.S. Dollar Index futures are trading slightly better after yesterday’s sharp rise. The market is trading inside yesterday’s range which indicates investor indecision and impending volatility. Today’s price action also indicates that yesterday’s move was probably generated by short-covering rather than aggressive buying. This usually means we’ll have a pullback into support.

The reason I think the rally was fueled by short-covering rather than new buying is because the catalyst behind the move was a surprise announcement by the Fed. I think the news that the Fed is still considering a third rate hike in December caught the bulls and the bears off-guard and the short-sellers were forced to cover.

U.S. Dollar Index
Daily December U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Wednesday when buyers took out 92.42. However, the rally stopped at 92.495. Taking out this level will extend the rally and possibly trigger a breakout to the upside with 93.06, but in order to get that move, investors are going to have to be willing to buy strength at some point. A rally consisting of all short-covering can be impressive, but it just won’t last.

The main range is 93.84 to 90.795. Its retracement zone at 92.32 to 92.68 is new resistance. This zone stopped the rally on September 14, on September 20 and earlier today.

Daily Forecast

Based on the current price at 92.25 and the earlier price action, the direction of the market today is likely to be determined by trader reaction to the 50% level at 92.32 and the downtrending angle at 92.22.

A sustained move over 92.32 will indicate the presence of buyers. If this generates enough upside momentum, we could see a quick move into 92.495 then 92.68. A breakout over 92.68 could fuel a move into a target angle at 93.03.

The inability to sustain a move over 92.32 will signal the presence of sellers. A move under the downtrending angle at 92.22 will indicate the selling is getting stronger. This could lead to a test of an uptrending angle at 91.92.

Watch for a technical bounce on the first test of 91.92, but if it fails, look out to the downside since the next major target angle doesn’t come in until 91.36.

Basically, look for a bullish tone over 92.32 and a bearish tone under 92.22.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement