US Dollar Index (DX) Futures Technical Analysis – Survives Volatile Week; Closes Over Major Pivot at 93.225

September U.S. Dollar Index futures posted a two-sided trade last week before closing higher. At various times during the week, traders were influenced by U.S. economic data, the latest Fed minutes, political issues in Washington and geopolitical events in Spain.

Most of the gains in the index can be attributed to the weakness in the Euro. This is because of the way the index is weighted. The Dollar also posted gains against the Japanese Yen, the New Zealand Dollar, and the British Pound. It suffered losses against the Australian Dollar and the Canadian Dollar.

Technical Analysis

The main trend is down according to the weekly swing chart. Last week’s rally to 94.06, however, helped make 92.39 a new main bottom on the weekly chart.

A trade through 94.06 will indicate that upside momentum is increasing. A move through 92.39 will signal a resumption of the downtrend with the May 3, 2016 main bottom at 91.45 the primary downside target.

The main range is 97.515 to 92.39. Its retracement zone at 94.95 to 95.56 is the primary upside target.

The short-term range is 92.39 to 94.06. Its 50% level or pivot is 93.225.

Forecast

Based on Friday’s close at 93.36, the direction of the U.S. Dollar Index this week is likely to be determined by trader reaction to the short-term pivot at 93.225.

A sustained move over 93.225 will indicate the presence of buyers. This could lead to a retest of last week’s high at 94.06. If buyers can take out this level then we could see an acceleration into the retracement zone at 94.95 to 95.56. A pair of downtrending angles passes through this zone at 95.27 and 95.35, making them valid upside targets.

A sustained move under 93.225 will signal the presence of sellers. This could lead to a pullback into uptrending angles at 93.14 and 92.77. The latter is the last potential support angle before the 93.39 main bottom.