US Dollar Index (DX) Futures Technical Analysis – September 29, 2017 Forecast

December U.S. Dollar Index futures are trading lower shortly before the regular session opening on Friday after confirming yesterday’s closing price reversal top. This chart pattern does not mean the trend is changing to down, but it is designed to alleviate some of the excessive buying. It also indicates that the selling is greater than the buying at current price levels which some call “overbought”.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 93.495 will negate the closing price reversal top and signal a resumption of the uptrend. This could lead to a surge into the next main top at 93.84.

The closing price reversal top was confirmed early Friday when sellers took out 92.92.

The major retracement zone is 93.43 to 94.05. This zone stopped the rally at 93.495 on Thursday.

The short-term range is 91.215 to 93.495. Now that the reversal has been confirmed, its retracement zone at 92.355 to 92.09 becomes the primary downside target. Since the main trend is up, look for buyers to show up on a test of this retracement zone.

Daily Forecast

Based on the current price at 92.915 (1114 GMT) and the earlier price action, the direction of the dollar index today is likely to be determined by trader reaction to the steep uptrending angle at 92.97.

A sustained move under 92.97 will indicate the presence of sellers while putting the index in a weak position. If selling volume increases on the move then look for a possible acceleration to the downside with 92.355 the next potential downside target.

A sustained move over 92.97 will signal the presence of buyers. This could fuel a retracement of the first break from the 93.495. If the buying continues then traders will try to erase the closing price reversal top.

Watch the price action and read the order flow at 92.97 all session. Trader reaction to this angle will tell us if the buyers are still in control, or if we should expect a correction.