The US dollar index is bouncing towards the 38% Fibonacci retracement. This is an important short-term resistance. The H&S target has not been reached yet, so we assume that this bounce will be temporary before a new lower low. A downward reversal is expected from 96 or 97.
Green line = H&S neckline resistance
Blue lines = H&S target projection
The 4-hour chart shows that the price is bouncing. Resistance by the yellow line/kijun-sen is at 95.70; and by the 38% retracement, at 96. So this area is an important resistance. If it is broken, we could see a push towards the cloud and the level of 97. As long as the price is below the cloud, the medium-term trend is bearish. Support is found at 94.40. If it is broken, we go towards our H&S target of 93.
According to the monthly chart, support is at 91.50 and at 89. Resistance is at 101.70 (61.8% Fibonacci retracement). The US dollar index has made a huge breakout above the Ichimoku cloud last year and, I believe, the 61.8% retracement will be achieved after this pullback is over.
The material has been provided by InstaForex Company – www.instaforex.com