The US Dollar index bounced as we expected from the 38% Fibonacci retracement level towards 95.50 as we mentioned in our last analysis. The price remains in a bearish medium-term trend as it is below the Ichimoku cloud. With Fed's rate decision on Thursday, I do not expect an important trend change or trend starting until then.
Green line – resistance
The US Dollar Index remains below the green trend-line resistance and below the Ichimoku cloud. The price bounced off the 38% retracement and it could still move higher towards the kijun-sen at 95.66. Trend remains bearish in the short-term but we should keep in mind that the Fed's rate decision could provide the signal for a new trend to start.
Red line – resistance
Green line – support
With a bullish flag pattern being formed in the weekly chart, my most probable scenario after the Fed rate decision is to see a breakout and push above 98.30 and the start of a new upward move to new highs above 101-102.
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