September U.S. Dollar Index futures are trading nearly flat. Without any major U.S. economic reports today, investors are going to have to rely on hawkish commentary from Fed officials to fuel a continuation of the rally.
The main trend is up according to the daily swing chart. Taking out the next main top at 97.48 will signal a resumption of the uptrend.
The main range is 99.565 to 96.02. Its retracement zone at 97.79 to 98.21 is the primary upside target. A pair of downtrending angles passes through this zone at 97.82 and 97.97, making them valid upside targets also.
Based on the current price at $97.255, the direction of the dollar index today will be determined by trader reaction to the uptrending angle at 97.02.
A sustained move over 97.02 will signal the presence of buyers. However, this market needs a spike in buying volume to send it higher. If we get a rally then buyers will go after the top at 97.48. They are going to try to drive the index into the resistance cluster at 97.79 to 97.82.
If the angle at 97.02 fails as support and sellers increase their pressure then look for a drive into the next uptrending angle at 96.52.
97.79 to 97.82 is a valid upside target today, but we won’t get there unless the volume picks up.