US Dollar Index

U.S. Dollar Index (DX) Futures Technical Analysis – Uptrend Reaffirmed; Holding Strong Side of Fibonacci Level

The U.S. Dollar is trading nearly flat against a basket of major currencies shortly after the release of the minutes from the Federal Reserve’s June meeting.

Federal Reserve officials last month felt that substantial further progress on the economic recovery “was generally seen as not having yet been met,” though participants expected progress to continue, according to the minutes of the U.S. central bank’s June policy meeting.

“Various participants” at the session still felt conditions for reducing asset purchases would be “met somewhat earlier than they had anticipated,” while other saw a less clear signal from incoming data, said the minutes, which were released on Wednesday at 18:00 GMT.

At 19:01 GMT, September U.S. Dollar Index futures are trading 92.620, up 0.077 or +0.08%.

Essentially, Federal Reserve officials talked tapering at their most recent meeting, but few seemed in a rush to get the progress going.

Daily August Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Wednesday when buyers took out the previous swing top at 92.760. A trade through the new main bottom at 91.995 will change the main trend to down.

The index is currently trading on the strong side of a long-term retracement zone at 92.495 to 91.850. This zone is potential support.

The intermediate retracement zone support is 91.950 to 91.490.

The best support is likely the price cluster at 91.950 to 91.850.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index futures contract into the close on Wednesday is likely to be determined by trader reaction to 92.495.

Bullish Scenario

A sustained move over 92.495 will indicate the presence of buyers. If this generates enough upside momentum into the close then look for buyers to take a run at the intraday high at 92.840. The daily chart indicates there is plenty of room to the upside over this level with the next target the March 31 main top at 93.430.

Bearish Scenario

A sustained move under 92.495 will signal the presence of sellers. The first target is a minor pivot at 92.420. This is followed by a potential support cluster at 91.950 to 91.850.

Side Notes

A close under 92.495 will form a closing price reversal top. If confirmed on Thursday then look for the start of a minimum 2 to 3 day correction.

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Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.