Red lines- bullish channel
Blue line- bearish divergence
Can the Dollar index sustain its upward trend? Price is clearly still in a bullish trend by making higher highs and higher lows. Price is still inside a bullish channel with no sign of a reversal. The only signs we have so far, are signs that the up trend is weakening. This is noted by the bearish divergence in the RSI. Price is trading very close to the upper channel boundary with the RSI providing a bearish divergence. This combination is not good. This combination justifies at least a pull back towards 101-101.50. Bulls need to be cautious over the coming sessions. Recent low at 103.39 is also considered important short-term support that if broken will increase chances of the index reaching 101-101.50.
