The Dollar index is testng intermediate-term trend resistance at 80.60-70. The upward move from the lows is impulsive and it unfolds as if there is high probability that the longer-term trend is changing and that we are in a big reversal level.
Our target of reaching 80.60 has been achieved and as shown in the chart above we have reached a strong resistance level. The upward move is still in three waves from 79.62. We need to see a small wave 4 towards 80.40 and then a new upward move towards new highs to complete 5 waves upwards. If prices go below the 80.18 high, there will be an overlap in the price pattern. If that happens then bulls should be very careful with a potential pull back towards the blue upward sloping trendline that supports this trend.
The daily chart confirms the increased probabilities that a trend reversal could be near, as the recent high at 80.70 is being challenged. Breaking above that level and completing 5 waves up from the low at 79.62 will be bullish for the index and will have 81.50 as target after prices make a downward corrective move. Concluding, we remain bullish with targets above 80.70 in the short term. A pullback towards 80.40-50 is very possible to complete wave 4 of the upward move that started at 79.62. We remain bullish.
The material has been provided by InstaForex Company - www.instaforex.com
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