The Dollar index shows signs of weakness as prices stay below the important resistance at 81. The pullback from 80.95 could very well be a back test, but unless we see a breakout above 81, we will not turn bullish. We should always respect the support and resistance levels. So bears could take the opportunity and go short just below the important resistance of 81 with 79 as target. On the other hand, bulls will need more evidence of strength in order to enter long positions.
As the chart shows above, the triangle was broken upwards and is now being back tested. Breaking below 80.55 could push prices towards 80. Breaking above 81 could push prices fast towards 81.50.
The daily chart continues to show us that bulls are not strong enough to break above the red resistance area. Breaking above the red resistance zone, the price will manage to reach 82.50 or higher. If we do not break this resistance area, we should anticipate new lows below 79. To conclude, the stop for bears is close and short term traders should take advantage of it. Use it as a stop reverse, so if resistance is broken, short positions should turn to long positions.
The material has been provided by InstaForex Company - www.instaforex.com
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