The US Dollar Index has reversed upwards from the 61.8% retracement as expected. Yesterday's lows are expected to be tested. An apticipated upward bounce came, but it is weaker than we had expected. I prefer to stay neutral and change to bullish once we break out above resistance of 95.85 .
Blue line = trend line resistance
The US Dollar Index not only bounced off the 61.8% retracement, but also broke out above the downward sloping blue trend-line resistance. We could see a move higher towards the important resistance at 96.60 where the lower cloud boundary is found. Support at yesterday's lows is very important as a breakout below it could mean that the bigger picture correction is not over and 93.10 will be in danger.
The weekly chart is showing signs of reversal. Unless bulls manage to push the Index towards 96.50 today, the weekly candle will give a sell reversal signal and will put 93.10 in danger. Currently, I remain neutral. My longer-term view is bullish. This does not mean we cannot make a deeper correction over the coming weeks towards 92.50. So patience is advised and no hurry moves.
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