The upward move for the Dollar index has been reversed by a sharp pull back that has broken our short-term trendline that keep us bullish. The short-term trend is downward and it looks like that Dollar index is heading towards new lows.
Early today, we saw the Dollar Index break our blue support trendline and thus changing our view to bearish as it was noted yesterday in case support failed to hold prices. Resistance is found at 80.25 and 80.75. Support is found at 79.85 and 79.64. The trend is downward and we believe that a new low is more probable to be seen than a new high above 80.75.
The sharp decline shows that strength is to the downside. Prices needed several days to move from 79.85 to 80.70, but only a few hours to take it all back. This is a bearish sign. Strong selling implies that more downside is possible. Concluding we will be looking to sell after any upward bounce with 80.75 as a stop and targeting a new low towards 79.50.
The material has been provided by InstaForex Company - www.instaforex.com
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