Red line - resistance
Blue lines -bullish RSI divergence
The Dollar index is trading around 104.25 challenging the resistance trend line. Bulls need to break above the resistance we are facing now in order to provide a new bullish signal (reversal signal). The Dollar index must break above 104.30-104.80 resistance area. Until then the index remains vulnerable to more downside. The RSI has provided bullish divergence signs implying down trend is weakening. Overall the chances of a reversal have increased and we believe that downside potential is limited. Traders should wait for signs of strength to end Dollar bullish positions.
