The Dollar index is pulling back as traders prefer to take profits on Dollar long positions before the BOJ, the FOMC and the ECB this week. The economic calendar is full of crucial events this week, so volatility is expected to rise.
Blue line -critical support trend line
Green line – support trend line for the short-term
Black line – resistance (broken)
The Dollar index is pulling back. The target for this pullback to stop is the black trend line that was broken at 95.50. If the Dollar index breaks below the black trend line again, we should expect it to find support at the Ichimoku cloud at 95.30-95.20 area. Resistance is found at 95.93 and next at 96.10.
Green line – critical support trend line
The weekly candle is battling around the weekly tenkan-sen (red line indicator). Price is below the weekly cloud. This increases the chances of a downward break. The last line of defense for Dollar bulls is the green trend line support. Each time the index reached that area, prices bounced strongly upwards. However the index has not managed to break above the weekly cloud resistance yet. Each time the resistance was reached we witnessed a rejection. These are not good signs for Dollar bulls. Keep in mind the following two price levels: 94.70 and 97.50.
The material has been provided by InstaForex Company – www.instaforex.com
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