The Dollar Index slided lower as buyers pushed EURUSD above 1.33, but it is still in a corrective pattern and there are no real concern for bears. The downward move in USDX has an overlapping pattern and we believe that the break out that is trying to take place now will break resistance at 81.70. Bulls need to break above the green downward sloping trend line. The price has managed to trade below the 76.4% Fibonacci retracement and this is not good for our bullish view. However, our stop and low at 81.40 was not violated and we remained long.
The short-term resistance is found at 81.70 and at 82.10. These levels must be broken upwards for a short-term trend to regain the bullish momentum. The short-term support is found at 81.50 and 81.40. We believe that the U.S. Dollar Index has a completed A-B-C downward formation. The price are managing to break above wave 4 of C and are trying to move above the bearish trend line now.
The daily chart has not changed our view. The 76,4% Fibonacci retracement still holds and we need to break above 82,80 for an intermediate term trend to change it to an uptrend. We expect the bulls to take control once again and the upward reversal to continue and for prices to stay above 81.40. In the longer term we keep bullish view as long as the price stays above 80.50. As far as trading is concerned, we are bullish with 81.40 stop and will look to add above 82.10 and 82.80.
The material has been provided by InstaForex Company - www.instaforex.com
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