The Dollar index has broken the short-term resistance. The move from the lows is an upward impulsive move with 5 waves complete. The pullback is corrective and has reached the 50% Fibonacci retracement of the rise from the 79.63 lows. The short-term trend has changed to upward, and we expect at least 5 more upward waves towards 81 if support at 79.85 and 79.63 holds.
The short-term trend may have changed to upward, but bulls need to be very cautious. The short-term resistance is found at 80.07 and 80.20. Breaking above those two levels will push the index towards 80.55-65. Bulls should not get carried away and play the bullish side of this trade very carefully.
The daily chart remains bearish and the trend continues to favor bears.There is no big trend reversal signal yet, and that is why we prefer small long positions, as mentioned above, in our short-term analysis. The longer-term picture is still bearish and will need a lot of time and money to create a trend reversal from this level. Breaking above 80.75 could be the initial signal of a trend reversal, but we have no signals pointing to that direction yet.
The material has been provided by InstaForex Company - www.instaforex.com
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