Yahoo Finance US Dollar Index (DX) Futures Technical Analysis – Buyers May Be Defending 88.067 Main Bottom
March U.S. Dollar Index futures settled lower last week after posting its worst weekly performance in 9 months. The move was primarily fueled by a breakdown in correlation between the dollar and Treasury yields.
Weekly Technical Analysis
The main trend is down according to the weekly swing chart. The market isn’t close to changing the main trend to up, but it is down 10-weeks from a main top, which puts it in the window of time for a closing price reversal bottom.
A trade through 88.150 will signal a resumption of the selling. This could lead to a test of the December 16, 2014 main bottom at 88.067.
Taking out last week’s low at 88.150 then turning higher for the week will signal that the buying is greater than the selling at current price levels. It will also put the index in a position to form a closing price reversal bottom.
As of February 16, the short-term range is 93.825 to 88.150. If the market holds in this range, or if a closing price reversal bottom fails then we could see a rally into its retracement zone at 90.99 to 91.66 over the near-term.
Weekly Technical Forecast
Based on last week’s close at 89.013, the direction of the U.S. Dollar Index this week is likely to be determined by trader reaction to the steep downtrending Gann angle at 88.83.
A sustained move under 88.83 will indicate the presence of sellers. This could drive the index into 88.15 then 88.067. This price is a potential trigger point for an acceleration to the downside.
A sustained move over 88.83 will signal the presence of buyers. This could trigger an acceleration to the upside. If the move generates enough upside momentum then look for the rally to extend into the short-term 50% level at 90.99, followed by a pair of downtrending Gann angles at 91.01 and 91.33.
This article was originally posted on FX Empire
