The Dollar index remains in a bearish trend. The head-and-shoulders pattern has provided us with a guide as to where to expect a low or pause to the decline. This level is at 93. However the downward sloping channel should also provide us with the boundaries that should not break if this bearish trend will continue.
Orange lines = bearish channel
Blue line = Resistance
The Dollar index is in a downtrend since it broke below 97.20-97 support. The short-term resistance is at 95.40 – 95.80. Breaking above this level could push the index towards the Ichimoku cloud in the area of 97-97.30. Otherwise if price remains contained inside the bearish channel, we should expect our target of 93 to be achieved.
The weekly chart remains bearish at least for the short-term. The sell signal was given when last week the index closed below the tenkan-sen and with a new low we said we were heading towards the kijun-sen at 93-94. The 38% retracement is important support for the longer-term trend.
The material has been provided by InstaForex Company – www.instaforex.com