Althought the Dollar index has broken the upward sloping trend line that started at 79, prices have found support at the previous resistance level at the 80.60-75 area. The support area is shown with green colours in the chart. Resistance is still the 81.50 area where a triple top was formed.
The decline to 81.50 is in three waves for now and we believe this is a corrective pull back. If prices break above the intermediate high at 81.30, we will have confirmation that the up trend is resuming and that the correction is over. Breaking below the green support area is possible if buyers are not able to break above 81.30. We are bullish in the longer term and as far as the short term is concerned, we want to enter long if prices break above 81.30 and add to long position if 81.50 is broken.
The daily chart is starting to form a pattern of higher highs and higher lows, something that will support our bullish view. Our first target now is the 82-83 area to be reached as long as we trade above 80.50. In the longer term stop for bulls is 79. The longer-term bears should not have a position as the trend is upward.
The material has been provided by InstaForex Company - www.instaforex.com
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