US Dollar Index (DX) Futures Technical Analysis – Trader Reaction to 93.345 Will Set Tone into Close

December U.S. Dollar Index futures are trading higher at the mid-session after giving back about half of its earlier gains. The Greenback is being supported by speculation that President Trump will appoint a hawk as Fed chair and on progress on U.S. tax reforms.

After the early session rally, the dollar began to retreat from its high due to a rebound rally in the Euro and after the release of weaker-than-expected housing data.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 94.100 will signal a resumption of the uptrend. A move through 92.590 will change the main trend to down.

The short-term range is 94.100 to 92.590. Its retracement zone is 93.345 to 93.52. The index is currently straddling this retracement zone.

Based on the current price at 93.35, the direction of the dollar index into the close is likely to be determined by trader reaction to the 50% level at 93.345.

A sustained move over 93.345 will indicate buyers are coming in to defend the intraday trend. This could create late session momentum to challenge the Fibonacci level at 93.52 and the downtrending angle at 93.66. This is a potential trigger point for an acceleration into the next downtrending angle at 93.88.

A sustained move under 93.345 will signal the presence of sellers. This could trigger a return break into the steep uptrending angle at 93.09. If this price fails as support then look for the selling to extend into a support cluster at 92.90 to 92.84.

Given the low volume, the index is likely to continue to straddle the 50% level at 93.345 into the close. However, if the Euro continues to rally, we’re likely to see the dollar weaken further.