The US dollar index is showing some signs of weakness as it has approached short-term resistance levels. The USDX is inside a big triangle pattern and as long as we see no breakout above the 98 level, bulls should be very cautious.
Green lines – triangle pattern
The US dollar index is being rejected at the upper resistance trendline of the triangle. The price is above the Ichimoku cloud. Support is at 97 and if it is broken, we could see a push towards 96.50, which is the most important short-term support. Resistance is found at 97.70-97.75 and in case of its break, we could see a push higher towards 98-98.20.
Red line – resistance trendline
Green line – support trendline
The weekly chart is showing the upward bounce from 96 has stopped at the red trendline resistance. More buyers are needed to break this resistance. There is still more sellers than buyers, and it has stopped the upward move. The battle between bulls and bears is strong in this area and that is why we are making a sideways move and no clear trending move. I believe the best strategy is to be neutral and wait. Patience is a virtue.
The material has been provided by InstaForex Company – www.instaforex.com