The Dollar index reversed its short-term bearish trend to bullish and brake above the downward sloping wedge as we had expected. There are increased chances that the recent low in the Dollar index will be an intermediate-term low and that a new upward move is at its beginning with targets above the previous highs.
Blue lines = downward sloping wedge
The Dollar index brake the downward sloping wedge yesterday and gave a short-term reversal signal. It is important now to see a break above the cloud resistance in the area of 94.60-94.90. Support is found at 93.80 as we could see a back test of the breakout.
Last week’s candle was not a good sign but bulls have stepped in and are fighting to regain control of the trend this week. We bounced from an important support area of the 38% retracement although we have not exactly reached that level. I believe that the Dollar index has many chances for an upward reversal and the start of a new upward move that will bring the index to new highs.
The material has been provided by InstaForex Company – www.instaforex.com