US Dollar Index (DX) Futures Technical Analysis – March 9, 2017 Forecast

March U.S. Dollar Index futures are trading slightly better shortly before the regular session opening. The volume is light and volatility is low as investors prepare for Friday’s U.S. Non-Farm Payrolls report.

The headline number is expected to be strong based on yesterday’s ADP Private Sector report which blew away the estimates. The Unemployment rate is not expected to be too much of a factor, which means the Fed will likely be looking at Average Hourly Earnings to be the final determinant of the rate hike next week. This number is expected to come in 0.3% higher.

We’re not expecting too much movement today, but investors may react late in the session to the 30-Year Treasury Bond Auction. Expectations are for a 3.01 percent yield. A higher yield will be supportive for the dollar.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through the next main top at 102.270 will reaffirm the uptrend. The main bottom is 101.225. A trade through this bottom will change the main trend to down.

The main range is 103.815 to 99.195. Its retracement zone is 101.505 to 102.050. This zone is controlling the longer-term direction of the market. The index is starting to inch above this zone, putting it in a bullish position.

The Fibonacci level at 102.050 and the 50% level at 101.505 are new support.

Forecast

Based on the current price at 102.105, the direction of the index today is likely to be determined by trader reaction to the Fib at 102.050.

A sustained move over 102.050 will indicate the presence of buyers. The first targets are angles at 102.32 and 102.38. The trigger point for an acceleration to the upside is the angle at 102.38. Overtaking this angle could drive the market into the next downtrending angle at 103.10. This is the last potential resistance angle before the 103.815 main top.

A failure to hold 102.050 will signal the presence of sellers. This could lead to a quick move into 101.98. Look for an acceleration to the downside if 101.98 fails as support with the next target angle coming in at 101.60.