The Dollar index has made a small upward breakout. Short term resistance at 80.40 was broken yesterday. However the big sideways triangle needs to be corrected in order to capture the sideways move better. So prices still remain inside the big sideways triangle despite breaking above the short term resistance. Prices have now short term resistance at 80.90 and short term support at 79.95.
The price pattern from 81.50 is still corrective. We feel that the Dollar index has more chances of making a new upward move than new lows. The new shaped triangle as shown above, shows very well where the resistance levels are. Prices are now testing the upper boundaries. This is a good place to go short with 81 as stop. Bulls should wait for a breakout to go long again.
The daily chart of the Dollar index shows a promising breakout of the green downward sloping trend line resistance, however it needs to break above the blue MA at 80.70 and then above the red resistance area where it was previously rejected. Support that should hold for bulls is the 79.70 lows. Longer term target is 82.50. Concluding we remain neutral, however we favor long positions near 80 and short positions near 80.60 with 80.95 stop.
The material has been provided by InstaForex Company - www.instaforex.com
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