The US dollar index is trading inside a bullish channel. There are several warning signs that between 98.50-99 we should expect a pull back as we are at overbought levels and several divergence signals are given. This is not the time to be buying dollars.
Green lines – bullish channel
Red line – long-term support
Short-term support is found at 98.25 while resistance lies at 99.45. Price remains above the short-term support depicted by the Tenkan-Sen (red line indicator). A 4 hour candle close below the Tenkan-Sen will give a bearish signal for a move towards the lower channel boundary at least and the Kijun-Sen (yellow line indicator) at 98.25.
Red lines – long-term trading range
Green line – support trend line
On a weekly basis, trend remains bullish after breaking the 96.50 level. Resistance comes at 99.50 and support for the entire bullish trend at 95. A pullback towards 96.50 is justified. However, a push below and inside the Kumo cloud will be a bearish sign. Bulls do not want the price breaking below the green trend line support. This will imply that 92 will be tested.
The material has been provided by InstaForex Company – www.instaforex.com
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