US Dollar Index (DX) Futures Technical Analysis – September 7, 2017 Forecast

September U.S. Dollar Index futures are trading lower as investors react to the European Central Bank’s monetary policy decision and ECB President Mario Draghi’s press conference. If Draghi is dovish then look for the index to rally. If Draghi is hawkish then we could see a steep break. Keep in mind that the index is not an equally weighted basket of currencies. The Euro is 57% of the index.

Technical Analysis

The main trend is down according to the daily swing chart. A trade through 91.55 will signal a resumption of the downtrend with the May 3, 2016 main bottom at 91.55 the next likely target.

The index is in no position to turn the main trend to up, but we could see the formation of a potentially bullish closing price reversal bottom.

The short-term range is 91.55 to 93.305. Its retracement zone is 92.22 to 92.43. Trading below this zone is helping to give the index a downside bias. Overtaking the zone will signal a shift in momentum to the upside.

The main range is 94.055 to 91.55. If there is a rally then look for a possible rally into its retracement zone at 92.80 to 93.10.

Forecast

Based on the current price at 91.81 and the earlier price action, the direction of the market is likely to be determined by trader reaction to the uptrending angle at 91.77.

If 91.77 is taken out by heavy selling pressure then look for a spike into 91.55 then 91.45. The daily chart is wide open to the downside under 91.45 with no target price in mind.

Holding above 91.77 will indicate the return of buyers. This could drive the market into a pair of Gann angles at 91.99 and 92.06.

Overtaking 92.06 could drive the index into 92.22. This is followed by 93.43. This is the trigger point for an acceleration into the downtrending angle at 92.68.

Basically, look for a bearish tone under 91.79 and a bullish tone over 92.22 and a choppy trade in between.