The Dollar index is heading towards the 61,8% Fibonacci retracement. Prices continue to trade downwards in a corrective overlapping pattern. We do not want to take action for now as we expect prices to resume their upward trend once the corrective phase is over.
If you compare the upward move from 79 and the downward move from 81.50, you will see that differences between impulsive and corrective patterns. The sideways sliding corrective pattern has been at force for too long and we expect prices soon to resume their upward trend that started at 79. The first buy singal will come once prices break above 80.60 and the next buy signal if prices break above 81.
The daily chart shows how prices are touching the lower channel boundaries where we expect support to be found. The slide could continue until the 61.8% Fibonacci retracement. Breaking below that retracement will be bad for the bullish scenario. We prefer to enter long only on signs of strength.
The material has been provided by InstaForex Company - www.instaforex.com
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