The Dollar index remains in a short-term down trend and has only managed to bounce towards the 38% retracement and could not move higher. I believe we should expect new lower lows over the coming weeks as we have broken below the 4-hour Ichimoku cloud and below the trend line support. I believe we should at least reach the 95 area.
Red line – trend line resistance
The Dollar index has made a bounce towards the 38% retracement and it looks like it has made a double top in that area. The kijun-sen (yellow line) resistance provides a strong wall for bulls that seem unable to break above it. At least for now. If this resistance at 96.80 is broken, we should expect price to reach the 97.30 level. A rejection at the kijun-sen resistance should bring prices lower to new lows. Support is at 96.10. If broken, I would expect price to move towards 95.
Red lines – triangle pattern
The Dollar index remains inside the triangle pattern on the weekly chart. Price got rejected as expected at the upper triangle boundary and is pushing lower towards the lower triangle boundary. For now support is provided by the weekly tenkan-sen at 96.05, so a weekly close below this level will surely push price towards the 95-94.80 support. An upward reversal and breakout above 98.30 will confirm a new uptrend has started with targets above 101.
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