The trend in the Dollar index remains down. The index continues to make lower lows and lower highs. The Dollar index was rejected at 79.80-90 resistance and turned lower to make new lows towards our target of 79. A few days ago, we mentioned that the bearish flag pattern was giving a target near the 79.15-79.
Short-term trend is down. Ichimoku cloud remains resistance as it is above the current price. Short-term support is found at 79.20-15 where the wedge boundaries are found as can be seen in the chart above. Short-term resistance is found at 79.80-90 and only if the index breaks above this level we can expect a test of the upper channel boundaries and the Ichimoku cloud resistance at 80-80.10.
The daily chart as shown above shows clearly why we preferred short positions the last few days. Trend is clearly down and can only change if the index manages to break above 80.20. The dollar index is heading towards 79 and we can see a short-term bounce up from that support level. Long-term trend will only change if price breaks above 81.40. Long-term trend is down.
The material has been provided by InstaForex Company - www.instaforex.com
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