USD Index Futures Find Footing Near 96.000

Posted Wednesday, December 26, 2018 by
Shain Vernier • 1 min read

After posting fresh yearly highs on December 14, March USD Index futures have been on the ropes. Rates have fallen consistently, dropping from above the 97.000 handle to the 95.500 area in only five sessions. The pre-Christmas volatility was extreme but has now seemed to have passed. At press time, the March USD Index is in rotation just above the 96.100 level.

Today has brought the release of several secondary economic metrics. In an earlier update, we talked about the upticks in the Redbook Index (Dec. 21) and S&P/Case-Shiller Home Price Indices (YoY, Oct.). Since then, the Richmond FED Manufacturing Index (Dec.) has been released to the public. The number came in at -8, dramatically underperforming estimates (16) and the previous release (14). While this piece of data is not a primary market mover, it is a FED statistic and does have a moderate impact on forex and equities trade.

March USD Index Futures

Perhaps the most striking observation taken from the March USD Index daily chart is the ranges of the past three sessions. Trade during the holiday season is typically muted ― this year has been anything but.

March USD Index Futures (DX), Daily Chart
March USD Index Futures (DX), Daily Chart

Here are the levels to watch for the remainder of the trading day:

  • Resistance(1): Bollinger MP, 96.250
  • Resistance(2): Daily SMA, 96.385

Overview: The daily chart for this market is showing an extreme consolidation pattern that is likely to continue in the near future. However, a directional move is possible by week’s end as institutional players balance their books before the new year kicks off next Wednesday. If we continue to see this market tighten, a breakout trade for late Thursday or Friday may be in the offing.

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