The US dollar index continues sliding lower but still it is inside a sideways neutral channel. As long as the price is below 96.70 short trades are preferred and only near 94.80 we would start looking for buying opportunities unless we see a breakout.
Blue lines -neutral short-term channel
Red lines – bullish channel
The dollar index has been making higher highs and higher lows since late April. Bulls need to see the breakout of the index above the upper red channel boundary in order to have confirmation of the uptrend towards new highs. A break below the red lower boundary will be a bearish sign that will push the index even below 92-91 level.
The weekly candle in the dollar index is promising for bears not bulls. The price is getting rejected by the weekly Kumo (cloud) and is testing the weekly Kijun-sen (yellow line indicator). If this weekly candle closes below 95.80 we should expect more downside next week. Strong resistance is at 96.70 and if we break it, we should expect a push higher towards 97.70 at least.
The material has been provided by InstaForex Company – www.instaforex.com