The Dollar index continues to trade sideways. Short-term trend is neutral but could easily change to up as the momentu from the big upward movement from 79.20 to 80.40 is strong. My preferred scenario is that Dollar will strengthen and the index will break resistance levels.
Short-term support at the 61.8% Fibonacci retracement has held and the index is trading above this level. Short-term resistance is found at 80.40 and then at 81. Short-term support is found at 79.70. If this support fails, we should expect the index to fall towards 79.55. Stop for bulls is 79.20.
The Dollar index is trying to move above the upward sloping long-term trend line that was once support and is now resistance. The Ichimoku cloud is still above the current price and that is why bulls should remain ver cautious. Long-term trend will change if price breaks above the Ichimoku cloud and the 80.70 resistance. We remain mildly bullish as long as we trade above 79.20.
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