The US dollar index remains inside the bearish channel. The trend remains bearish in the medium term but we have short-term bullish reversal signs. We have been calling a reversal off the 92.50 price area and so far we were correct. Our primary scenario expects a big bounce above November highs.
Black lines – bearish channel
The US dollar index remains inside the bearish channel and below the 4-hour Ichimoku cloud. Trend is bearish. However I believe that this upward bounce is a part of a bigger bounce that is expected eventually to push the price above 95. Support now is at 93 while resistance levels are found at 93.50 and 93.80. A break above the 4-hour cloud will be a bullish sign.
The US dollar index is reversing off the 61.8% Fibonacci retracement. This bounce is expected to move the price higher. Resistance on a weekly basis is at 94 and 94.50. A weekly close above these two levels will most probably push the index towards the weekly cloud at 96.50-97. As long as we do not break below this week’s lows, I remain bullish.The material has been provided by InstaForex Company – www.instaforex.com