US Dollar Index (DX) Futures Technical Analysis – October 31, 2014 Forecast

December U.S. Dollar Index futures surged on Friday after the Bank of Japan announced new stimulus measures.

The news triggered a resumption of the uptrend when the index took out the previous main top at 86.87. This price is new support, followed by an uptrending angle at 86.025.

On the upside, the first key target is a monthly Fibonacci level at 87.31. A sustained move over this level could trigger a rally into a steep angle at 87.525.

Now that the index has taken out the former top at 86.87 with conviction, it is important that buyers hold it above this level. This will indicate that real buying rather than short-covering is controlling the market.

The tone of the market will be determined by trader reaction to 86.87. The first target at 87.31 is another potential acceleration point.