The Dollar index remains weak. Trend is neutral. Support is at 79,90 is expected to be tested. The Dollar index has not managed to move above the 38% Fibonacci retracement at 80,40. If the index manages to break above that level, we can see a move towards 80,60 which is next resistance and why not 81.
Bulls will need to hold the index above 79,90 in order to have a chance for any good upward bounce. Otherwise, if support fails, we should expect the index to make new lows towards 79.
The Dollar index might have formed a bearish flag that is now broken and we should expect more downside pressures. The real test will come at 79,90 and 79,75 the two horizontal support levels. These two levels are critical for the longer-term trend of the index. Our upside target for the bounce is inside the blue rectangle area. If support holds, another bounce should come that will push prices towards 80,60. Above 80,80 bulls can be more confident that the index can reach 81.
The material has been provided by InstaForex Company - www.instaforex.com
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