The Dollar index has formed a double bottom around 92.70 but price is bouncing. The medium-term trend remains bearish but a bounce higher towards 94 should not be ruled out.
Blue rectangles - double bottom
The decline in the Dollar index has paused around the support area of 92-93 as we expected it would in previous analysis. This is a major support area because both horizontal support is found here and a long-term upward sloping trend line comes from this area.
The Dollar index justifies a move higher and a bigger bounce towards 94. Price is at major confluence of support and we do not expect this support to break easily. At least a bounce should follow. That is why we do not prefer to be very bearish the Dollar currently. Only in specific pairs and specific setups we would choose to be bearish USD. In general the Dollar could continue to bounce higher this week. This bounce is considered selling opportunity.
