The Dollar Index has found support at the 81 price level just below the 76,4% Fibonacci level. Prices have made a small upward bounce but we still see no important upward break out. Prices are trading below the short-term downward sloping trendline. A price reversal around these levels is expected but we still have no sign.
We prefer being neutral as there is no bullish pattern evident if you look at the above chart. The trend remains downward and no resistance level is broken. Prices make lower lows and lower highs confirming downtrend. Short-term resistance is found at 81.45-75. Support is found at 81.10-81.
The longer-term chart above shows that the Dollar Index is trading just above the long-term support channel. This increases the chances of a trend reversal. The fact that for such a long time this channel is not broken downwards, increases the chances of an upward reaction to test recent highs at 82.70. Concluding we are neutral to bullish market, as prices are trading above important support levels. The longer-term view remains bullish as long as prices trade above 80-80.50.
The material has been provided by InstaForex Company - www.instaforex.com
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