The Dollar index has broken its important short-term support at 80.40 that we mentioned and moved towards our target of 80.10-20. Now it stands right on top of a major trend line support that if broken could push the index towards 79.
The rejection at 80.80 was important as it signalled more weakness and confirmed that trend is down. If the dollar index breaks above 80.40, we should expect a bounce towards the upped channel boundaries at 80.60. Important resistance for the intermediate-term is 80.80.
The daily chart doesn't look good. Today's candlestick has broken the upward sloping trend line but finds support at the previous lows made early December. Breaking those lows could push the index twards 79.50. Important resistance on a daily basis is the 80.80 price level. If the index makes a daily close above that level, then we could say that trend has reversed up. Until then, we remain bearish.
The material has been provided by InstaForex Company - www.instaforex.com
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