The Dollar Index has not made much improvement to the upside and has only moved in a corrective pattern sideways towards the downward channel boundaries. This brings resistance levels lower and soon will be put to the test. Most probable outcome will be for the Dollar Index to make a new lower low towards 80, but we should not exclude any upward surprise specially if the short-term resistance at 80.65-50 is broken upwards.
The prices continue to trade within the downward sloping channel and if the bulls want to have even the slight chance of trend reversal, the index will first need to break above 80.65 and then move above 81.45. Trend remains down and short-term support is found at 80.20. Short positions at 82.40-45 are favored with 82.65 stop and target near 80 or even a new low at 79.90.
The daily picture remains ugly and re-enforces our view that a new low should be expected as the downward pressures are most probably only making a pause. More selling pressures are expected for the Dollar Index that will put the low at 78.85 to the test. Support in the daily chart is found at 79.20-78.85 and resistance at 81.60-82.15. Concluding we prefer short positions as long as the prices trade below 80.65 with 80 as the first target.
The material has been provided by InstaForex Company - www.instaforex.com
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