The Dollar strength was yesterday's main characteristic as prices after breaking above the 81.25-35 resistance moved towards our first target of 81.70-80. Prices now find themselves challenging the important resistance at the 82 price level. Breaking above this resistance will decide if the intermediat term trend will change to up or remain down.
The price will need to break out and above the sideways huge triangle that is being formed as shown in the hourly chart above. Prices need to break above 82 in order for the longer term trend to change to up. The price pattern still remains bearish as the sequence of lower lows and lower highs remains. This will change if prices break the 82 resistance.
In the daily chart we can very easily recognise the downward trend that puts pressure to prices. The downward sloping trend line places resistance at the 82 price level. Concluding, the price will need to break above 82 in order for trend to change. Despite the recent strong bounce from 80.75 to 81.72, the Dollar index could fall to new lows if prices get rejected at the trend line once again. As long as we stay below the trend line we are bearish or neutral. Breaking above will make us bullish biased.
The material has been provided by InstaForex Company - www.instaforex.com