The trend of the Dollar Index remains downward as the price continues to trade within the short-term downward sloping channel. Short-term resistance is found at 81.10 and 81.25. Support is found at 81.00 and 80.90. Although we still believe a bigger trend reversal should be expected, we will not enter long positions yet unless we see an upward break of resistance levels and an impulsive upward move.
The longer-term view supports a bounce from these levels as the price trades on top of the longer-term channel lower boundaries as shown in the daily chart below. We expect a bounce but as long as no resistance level is broken, we will stay neutral.
The Dollar Index will change its trend to upward if the blue downward sloping trend line is broken and if the prices breaks above 82.50. These two conditions must be met for the intermedate term trend to change to upward. Concluding, we favor long positions when the price breaks above resistance at 81.25 with 80.87 stop and target at 81.75 at least. Otherwise, we remain neutral waiting for a breakout.
The material has been provided by InstaForex Company - www.instaforex.com
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