In This Article:
June U.S. Dollar Index futures closed sharply higher last week and in a position to challenge the top from the week-ending November 17, 2017 at 94.42. A move through this top will indicate the buying is getting stronger. This is also a potential trigger point for an acceleration to the upside since the next major target is the June 20, 2017 main top at 97.77.
The main trend is up according to the June U.S. Dollar Index weekly swing chart. The market is not in a position to change the main trend to down, but it is up 15 weeks from the last main bottom, putting it in the window of time for a potentially bearish closing price reversal top.
This chart pattern will not mean the trend is getting ready to turn down, but it will signal that the selling is greater than the buying at current price levels. This could lead to a 2 to 3 week correction.
The minor trend will change to down on a move through 92.115. This will also shift momentum to the downside.
The contract range is 97.77 to 78.83. The index is currently trading on the bullish side of its retracement zone at 93.36 to 92.30. This is helping to give the index a strong upside bias. Crossing to the weak side of this zone will indicate the selling is getting stronger and that momentum is shifting to the downside.
Forecast
Based on Friday’s close at 94.13, the direction of the June U.S. Dollar Index this week is likely to be determined by trader reaction to the long-term downtrending Gann angle at 93.71.
A sustained move over 93.71 will indicate the presence of buyers. This could create the upside momentum needed to challenge the steep uptrending Gann angle at 95.33. Crossing to the bullish side of this angle will indicate the buying is getting stronger. This could trigger a rally into the next long-term downtrending Gann angle at 95.24.
The angle at 95.24 is the last major downtrending Gann angle before the 97.77 main top.
A sustained move under 93.71 will signal the presence of sellers. This could drive the market into the Fib level at 93.36. This price is the trigger point for a possible break into the main 50% level at 92.30 and the minor bottom at 92.115. If the minor bottom fails as support then we could see a further break into the next uptrending Gann angle at 91.58.
Watch the price action and read the order flow at 93.71 all week. Trader reaction to this level will tell us if the buying is getting stronger or if sellers are taking control.
This article was originally posted on FX Empire