The Dollar index currently at 80.66 is forming a bullish pattern of higher highs and higher lows. The low at 80.50 is now very important for the short-term trend. The Dollar index has retraced 61.8% of the rise from 80.24 to 80.90 and is now turning higher. 80.50 is the stop for bulls. Breaking below that level will put the bearish scenario of targeting 80 back in play.
The Dollar index is fighting the Ichimoku cloud in the 4-hour chart as shown above. Longer-term trend is unclear but short-term trend seems supported at 80.50. Breaking above 80.90 will push prices towards 81.50. If support at 80.50 and 80.40 fails we should expect the bearish scenario to be in play and we should anticipate to see 80. For now we favor the bullish scenario.
The Dollar index is consolidating near the highs and above the 23% retracement. The deepest retracement level that was reached was the 38% Fibonacci level. This consolidation near the highs makes our longer-term view unclear, but according to our short-term view, being long is preferred as long as we trade above 80.50. 80.50 if broken will find us reversing our long positions to short.
The material has been provided by InstaForex Company - www.instaforex.com
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