US Dollar Index (DX) Futures Technical Analysis – Weekly Direction Controlled by 92.52 Gann Angle

September U.S. Dollar Index futures are trading lower early Monday. The index is reacting to a stronger Euro which hit a 2 ½ year high shortly after the opening. Euro traders continue to respond to speeches by European Central Bank President Mario Draghi and Fed Chair Janet Yellen at Jackson Hole on Friday.

Bullish traders like the fact that Draghi refrained to talk about an overvalued Euro. Dollar bulls were disappointed that Yellen failed to talk about monetary policy including the direction of interest rates and the start of the process of trimming the Fed’s balance sheet.

Technical Analysis

The main trend is down according to the weekly chart. The downtrend was affirmed when sellers took out the previous main bottom at 92.39 on Friday. If the downside momentum continues then look for a possible move into the May 3, 2016 main bottom at 91.45. The trend will change to up on a move through 94.055.

Forecast

Based on Friday’s close at 92.677, the direction of the U.S. Dollar Index this week will be determined by trader reaction to the downtrending angle at 92.52.

A sustained move under 92.52 will indicate the selling pressure is getting stronger. This could lead to an eventual test of the May 3, 2016 bottom at 91.45.

Overtaking and sustaining a rally over 92.52 will signal the presence of buyers, or that the selling pressure has stalled. This could trigger a short-covering rally into short-term downtrending angles at 93.06 and 93.56.

Three events this week could determine the direction of the U.S. Dollar. They are the announcement of President Trump’s tax reform plan and the U.S. Preliminary GDP on Wednesday and Friday’s U.S. Non-Farm Payrolls report.

The tax reform plan could trigger the biggest upside reaction if Trump presents it the right way.