Our bullish expectations and view was canceled yesterday by the new lows we saw in the chart. The rejection at 95.30 was important and it proved that the trend remained bearish. However, if you recall, my Head and Shoulders pattern target was at 93.50-93. So, that we have reached the target I still believe that we could see a reversal. What are the signs of the reversal?
Green line = neckline
Red horizontal line = target level
Red downward sloping lines = bearish channel
The Dollar index remains below the cloud resistance. The trend remains bearish. The price needs to break above the cloud to confirm changes in the trend . Short-term resistance is found at 93.75 and at 94.20. Medium-term resistance is at 95.30. This is the most critical level. Support is at 93 and at 92.30 where the 38% retracement of the entire 2014 rise is found.
The Dollar index has broken below the kijun-sen, but with two more days left for the weekly candle to close. Bulls still have hopes for immediate reversal to the upside. Next support is at 92.30 where the 38% retracement is found. Reversal to the upside will be confirmed if price breaks above the tenkan-sen at 96.75.
The material has been provided by InstaForex Company – www.instaforex.com