The US Dollar Index makes a short-term consolidation while it remains below the 50% retracement. The longer-term view remains vulnerable to the downside and a deeper correction towards 92.50 or even 90. The area of 97-98 is the important resistance area for the longer-term trend.
Blue lines – triangle pattern
The US Dollar Index continues to trade above the cloud and below the 50% retracement resistance. If we break this triangle pattern we should expect a push towards the cloud support at 94.55. In case of a breakout through the support, the chances that the upward bounce is over and a new downward move is starting will increase. On the other hand, a break above 95.70 will be a bullish signal that target shifts to 96.20 and then 97.50.
The weekly chart continues to trade around 95.10 where the kijun-sen (yellow line) indicator is found. This weekly candle has hit a higher high and a higher low than last weeks candle. This is a bullish sign, but not enough for full-scale upward reversal. Important support is at 93.55. If this level gets broken, we should expect a sharp move towards at least 92.50.The material has been provided by InstaForex Company – www.instaforex.com