The rejection of the Dollar index at the 80.60 price level was very important as we noted in previous analysis. I also mentioned that support at 80 and 79.70 was very important and if the price breaks below these levels, we should expect a sharp decline that will challenge the lows near 79.20. This is exactly what is going on with the Dollar index now. The trend remains down. Momentum is bearish but a bit oversold. Price has reached the important lows of 79.20.
Dollar bulls need to break above the Ichimoku cloud if they want to have any chance of success. Bears dominate the index for the time being and unless we see a strong bounce off the lows at 79.20, any upward pullback will be met with selling pressures. Support is at 79.20 and if broken we should expect the index to break below 79.
The daily chart as shown above confirms how bad things are for Dollar bulls. Support is broken. Trend line support is also broken. Ichimoku cloud and the downward sloping trend line resistance remain strong above the current price, imposing strong resistance. For bulls to really reverse the long-term trend, the 80.70 levels need to be broken. Until then, bears will be in control.
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