The Dollar index continues to make lower lows and lower highs. However, it is very near the resistnce trend line as shown in the chart below. If prices break above 79.40, we should expect a bigger upward bounce towards 79.65-80. If prices do not manage to make a break out above the trend line, then we should expect prices to make new lower lows near 79.
Our view remains bearish as all downward moves are impulsive and upward moves are overlapping and of corrective nature. Short-term traders could go short with the 79.40 stop and the 79 target.
Nothing has changed regarding the longer-term trend. Prices continue lower as trend in the daily chart remains downward. The slope of our Moving averages remains negative. There is increased probability that the decline from 80.75 is a 5 wave down complete move and there is also increased probability of a bigger than normal upward bounce, maybe towards 80. So bears need to be very cautious and use tight stop loss levels at 79.35-40.
The material has been provided by InstaForex Company - www.instaforex.com
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