US Dollar Index (DX) Futures Technical Analysis – Still Has Work to Do on the Weekly Chart

Despite the strong performance to start the week and the month, the September U.S. Dollar Index still has a lot of work to do on the upside before we can even think about a bullish dollar according to the weekly chart.

Technical Analysis

The main trend is down according to the weekly chart.  Serving as proof of the well-established downtrend is the series of lower tops and lower bottoms since the first week of 2017.

A trade through 95.225 will signal a resumption of the downtrend. This could drive the index into the September 23, 2016 main bottom at 95.225. The weekly chart opens up to the downside under this bottom.

The main trend will change to up for the first time in months on a trade through 97.515. The next top comes in at 99.565.

The short-term range is 97.515 to 95.225. Its 50% level or pivot comes in at 96.37. Since the trend is down, we’re likely to see sellers emerge on the first test of this level.

Forecast

The index posted a strong rally the first two days of the week, but all of that is related to Friday’s closing price reversal bottom on the daily chart. The weekly chart is another story.

If the upside momentum continues, we should see a test of the pivot at 96.370 later this week. If sellers come in on a test of this level to stop the rally then look for a pullback toward last week’s low at 95.225.

Taking out 96.370 will signal the presence of buyers. This could generate the upside momentum needed to challenge a pair of downtrending angles at 97.02 and 97.10.

If buyers can overcome 97.10 then look for the index to jump to a resistance cluster at 97.51 to 97.515. Taking out this area will change the main trend to up.