The Dollar index got rejected once again at 81.50 resistance and we said in our last analysis that a pull back was to be expected. The index pulled back towards 81 and is being pulled by our MA towards 80.85. We believe that more downside pressures are to be expected and we could see the index reach even 80.70-60.
In the short-term chart above we witness a double top around 81.35-40 and this could mean that prices could reverse back down to test the long-term support trend line at 80.20-30. The next couple of days are important, because if the index is too weak to break resistance at 81.50, we should expect downward pressures to bring it closer to support.
The intermediate-term trend is up as the index makes higher highs and higher lows. We will say it again as it is very important for the bulls to see the index break above 81.50. The important daily support level is 80.40-30. Breaking below this level will give a sell signal. breaking above 81.5 will give a buy signal with 82.50 target. The long-term trend is neutral as the index moves mainly sideways between 84-78. Today we believe that short positions should be preferred with 81.35 stop and 80.70 target.
The material has been provided by InstaForex Company - www.instaforex.com
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