US Dollar Index

US Dollar Index (DX) Futures Technical Analysis – September 26, 2017 Forecast

December U.S. Dollar Index futures are surging on Tuesday mostly in reaction to a weaker Euro, which is heavily weighted in the calculation of the index. The Euro hit its weakest level against the U.S. Dollar since August 25 after posting its sharpest one-day loss since December on Monday.

Euro sellers are worried about the German economy because last weekend’s election results have forced election winner German Chancellor Angela Merkel to form a government with other parties. This could prove to be a lengthy and difficult task.

It may also make closer Euro Zone integration difficult which has struck a note of caution with respect to French calls for fiscal union. The French government would like to see a more unified Euro Zone and is calling for a fundamental overhaul of the region.

U.S. Dollar Index
Daily December U.S. Dollar Index

Daily Technical Analysis

The main trend is up according to the daily swing chart. Today’s price action has solidified the trend which turned up last Wednesday but failed to follow-through to the upside until today. The rally also made 91.215 a new secondary higher bottom.

If the upside momentum continues then buyers will go after the next main top at 93.06, followed by 93.34 then 93.84.

The main range is 93.84 to 90.795. The index is now trading on the strong side of its retracement zone at 92.68 to 92.32. This makes this zone new support.

Daily Forecast

Based on the current price at 92.88 and the earlier price action, the direction of the index the rest of the session is likely to be determined by trader reaction to the long-term downtrending angle at 92.93 and the Fibonacci level at 92.68.

Taking out 92.93 will indicate the buying is getting stronger. This could trigger a further rally into the main top at 93.06, followed by the next main top at 93.34 and another long-term downtrending angle at 93.39. This is the last potential resistance angle before the 93.84 main top.

The inability to overcome 92.93 will indicate the buying is getting weaker and the selling may be getting stronger. Crossing to the weak side of the Fibonacci level at 92.68 will indicate the selling is getting stronger. This could trigger a sharp break into a support cluster at 92.33 to 92.30.

Essentially, look for a bullish tone the rest of the session on a sustained move over 92.93 and a bearish tone on a sustained move under 92.68. Of course, the direction of the dollar index will be determined by the direction of the Euro.

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.