ICE Futures Singapore Monthly Report

The MINI U.S. DOLLAR INDEX^® FUTURES (SDX) ended September with a loss of 1.09% at 100.52, marking its third consecutive monthly decline and erasing gains made earlier in the year. This bearish sentiment was driven by a combination of mixed economic data releases and Federal Reserve policy decisions throughout the month.

The Mini U.S. Dollar Index ® Futures (SDX) started September with a mixed performance, initially continuing its bullish trend despite weak ISM Manufacturing data which led to a gain of 0.14% closing at the midpoint of the daily Bollinger Bands on September 3rd. However, bearish sentiment took hold mid-week exacerbated by disappointing ADP Employment figures. The week ended on a cautiously positive note with the release of Nonfarm Payrolls data, which, while missing forecasts, showed improvement from the previous month. Despite signs of a softening labor market, the SDX closed at 101.15 with a gain of 0.07%. The SDX closed the week with a loss of 0.47%.

On September 9th the SDX rallied to close the day with a 0.37% gain at 101.52, marking its first close above the midpoint of the daily Bollinger Bands since early August. The index continued to show strength the following day, gapping up at the open. Mid-week brought mixed reactions to inflation data and the SDX closed slightly higher despite surprising CPI figures. However, the momentum shifted on September 12th as the Producer Price Index missed expectations, causing the SDX to close down 0.30% at 101.35, resting on the midpoint of the Bollinger Bands. The week ended with a gap down and a break below the midpoint leading to a lower close. The SDX ended the week at 101.12 with a marginal loss of 0.02%.

The SDX traded lower overall the following week, briefly rallying on positive Retail Sales data. The Fed's surprise 50 basis point rate cut on September 18th, the first since March 2020, led to a 0.28% loss. Volatility peaked on September 19th as markets digested the Fed's decision, with the SDX reaching a high of 101.17, breaching the midpoint of the Bollinger Bands before bearish sentiment drove the market lower to close at 100.32. The SDX closed the week with a loss of 0.69% at 100.43.

The following week the SDX traded sideways, finding support near the lower boundary of the daily Bollinger Bands amid mixed economic news. The strongest performance was on September 25th closing up 0.46% at 100.63. Despite this, it wasn't enough to offset earlier losses and the SDX ended the week with a loss of 0.31% at 100.11. The final trading day of the month saw the SDX rally to close with a gain of 0.41%. The Mini U.S. Dollar Index ® Futures ended September down 1.09% at 100.52.

Daily technical indicators of SDX prices indicated a strong sell overall based on the moving averages. The technical oscillators indicated mainly neutral conditions, which could prompt investors to consider waiting for a pullback before seeking trading opportunities. Historical volatility indicated that the price from the prior month’s close could range between 102.39 to 98.51 within the next 31 days. Investors or traders could consider the weekly support (99.26 to 97.84) or resistance (103.11 to 102.11) areas for planning their entries or exits, depending on their trading strategies. The SDX remained in a downtrend on the daily and weekly timeframes.

Source: TradingView | Average True Range: using daily ATR (14) | Support & Resistance Levels: using AutoUFOs^® (0.5) applied to daily and  weekly timeframes (plotted as dotted lines that represent relevant support and resistance price zones colored as follows:

red = resistance levels & green = support levels)

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