The Dollar index has held above important support at 79.30 and has made a short-term upward break on Friday that could bring the index towards 79.80. Short-term trend is up as long as price remains above 79.30. Important resistance is found at 79.80-80.
Intermediate-term trend remains down. The Ichimoku cloud is above current price and places a lot of pressure to bulls. Bears have the upper hand but important previous low at 79.20 is still not broken. As long as this low is not broken, bulls still hope for another reversal. Strong resistance is found at 80 and at 80.60. Bulls need to break above these two levels in order to have hopes of a larger trend reversal.
The daily chart confirms that bulls are in pressure and that the index remains in a downtrend as the high at 80.60 is substantially lower than the previous important high at 81.30. If the index manages to break the important low at 79.20 this will be a big sell sign as the longer-term trend will have another confirmation with a new lower low. Short-term traders can take a long position with 79.20 stop and 79.80 or 80 as target. A break above 80 will push the index towards the previous high and resistance at 80.60. Bears, on the other hand, can try to sell short the index near 79.80 with 80.25 stop.
The material has been provided by InstaForex Company - www.instaforex.com
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