We stressed many times before how much important was the support at 79.20. The dollar index has held this important level and has started an upward bounce. Our target given in our past analysis for this bounce is 79.85 or just below 80. This level is important resistance both in short- and long-term charts.
The index is bouncing and needs to show more signs of strength in order to get a confirmed trend reveral. The trend remains downward and this upward bounce could be corrective, meaning another move down will follow. If the Dollar index breaks above 80, then there is high probability that the recent high at 80.60 will be challenged. Breaking below support at 79.30-.20 is very bad for bulls as this will trigger aggressive selling towards 78.50 at least.
The daily chart confirms that the long-term trend is down as current price remains below both the downward sloping trend line and the Ichimoku cloud. Important daily resistance is found at 80.50-.60. Breaking above this level will be a bullish sign and a probable trend reversal confirmation. Short-term resistance is found at 80. If the price breaks above 80 on a daily close, then trend becomes neutral.
The material has been provided by InstaForex Company - www.instaforex.com
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