The Dollar index has held its support levels and is making an upward bounce and try to break above the resistance level at 81. Last week we noted that it should be preferred to buy and open long positions near support levels at 80,50-45. Now prices trade near 80,85-90. This upward bounce will find resistance at 81.
The short term downward sloping channel has been broken and we should expect prices to test the upper boundaries of the sideways black triangle. We are bullish with 80,40 stop. We believe it is time for this sideways move to end. If prices reach the upper triangle boundaries and do not manage to break them, then we will sell.
The daily chart shows that prices have found support at the lower black channel boundaries and at the MA. We observe that the decline is corrective as it is more sideways and overlapping. However the lower lows and lower highs pattern continues. If this pattern changes, we will have confirmation on the daily chart that a reversal is starting. This will be signalled if prices break above 81,35. For now we are longer term bullish as long as prices trade above 79. If the black channel is broken upwards, we will be able to raise our stop to 80,40.
The material has been provided by InstaForex Company - www.instaforex.com
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