The Dollar index made new highs yesterday and continues to rise. Price remains in a bullish trend in all time frames. Overbought conditions and divergence signs are still there providing a warning. 100 price level is important junction for a short-term trend reversal.
Black lines – bullish channel
The Dollar index continues to trade above the Ichimoku cloud and inside the bullish channel. Short-term support is at 100 where the cloud support is found. Price is very close to the upper channel boundary. At current price levels I would not only look to protect longs but also look to short this index. A pullback is warranted and justified.
Blue line – previous highs
Red lines – trading range
Green line – important support trend line
The Dollar index is breaking to new multi-year highs with an impressive breakout and very strong bullish trend. On a weekly basis there are important bearish divergence signals in the stochastic oscillator. A pull back towards 98 could be justified. However the bullish trend will be in danger if prices break below the green trend line support.
The material has been provided by InstaForex Company – www.instaforex.com
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