The Dollar index is making new highs after the FOMC meeting yesterday and the announcements on Fed policy by Janet Yellen. Bulls should not be very enthusiastic at current levels and should not chase the bullish trend. Trend however remains strongly bullish and therefore bulls should protect their positions by raising their stops.
Red line – resistance
Black line – support
There is bearish divergence in both oscillator indicators. Despite the new high in price, both the RSI and the Stochastic did not produce a new high. Bulls need to be very cautious. The 99 price level is very important support both in the short and long term.
Green line – trend line support
On a weekly basis, we have new highs and a break above the 61.8% Fibonacci retracement. Last week’s low at 99.44 is now a very important support level. As long as price is above that level trend remains bullish. Only the weekly stochastic is diverging in overbought levels. If the RSI joins, this will be a very big warning.
The material has been provided by InstaForex Company – www.instaforex.com