The Dollar index has broken the consolidation towards the upside to new highs at 98.50. Trend remains bullish but there are several warning signs for bulls that they should not ignore. Trend is expected to change soon.
Green lines – bullish channel
Red line – long-term support
Blue lines -short-term consolidation
Price is still above the Ichimoku cloud. Price has broken resistance yesterday. The RSI is diverging on the 4-hour chart. This upward move is now fragile and expected to reverse soon.
On a weekly basis, the Dollar index continues its up trend after the successful breakout from last week above the Ichimoku cloud. The follow through is an important bullish sign. Important weekly resistance is found at 99.50. I do not believe the Dollar index has the power to reach that level straight up from current levels. I believe that at least a pullback is justified to backtest cloud support and breakout area. I’m bearish about the Dollar at least for the short term.
The material has been provided by InstaForex Company – www.instaforex.com
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