Election night trading brought huge levels of participation to December USD Index futures. Rates have traded in a whipsaw fashion, featuring a failed auction above Tuesday’s high and test of daily downside support levels. As the markets continue to digest the result of the election, volatility will subside as the intermediate-term view of the Greenback comes into complete focus.

During the pre-Wall Street open, the U.S. MBA Mortgage Applications (Nov. 2) came in at -4.0%. This figure is well under the previous number of -2.5% and is an extension of the recent downtrend. Lagging mortgage applications reinforces the recent underperformance of the U.S. real estate sector. From a macro perspective, it appears that FED tightening is hampering the flow of capital into the housing markets.

USD Index Futures

December USD Index futures have been on a rollercoaster since returns from Tuesday’s elections began to trickle in. Shortly after the electronic open, the USD Index broke north to 96.250. Subsequently, it has been all downhill from there.

Here are a few levels to watch for the rest of the session:

• Resistance(1): Bollinger MP, 95.775
• Support(1): 78% Retracement, 95.595
• Support(2): Daily SMA, 95.420

Overview: At press time, price is rotating in a noncommittal area between the Bollinger MP and Daily SMA. Both levels are above the big-round-number of 95.000. This is a positive sign for USD Index bulls as the long-term uptrend for 2018 remains intact.

In the event price stalls near daily support, a position long may set up by the end of week. Be sure to stay tuned for ideas on how to trade the USD Index as tomorrow’s FED Interest Rate Announcement draws near.