The Dollar Index has broken outside of the downward sloping trend channel. However, the break out has not been accompanied by an upward impulsive move. The move is a sideways pattern with overlapping structure and no clear trend. The pattern looks more like a bearish flag ready to break downards.
The Dollar Index currently trades at 80.50 having tested yesterday our resistance at 80.65, but not being able to break impulsively above it. Support is found at 80.45. If broken then the bearish flag pattern will have given a sell signal with 80.20-80 as target.
The above chart shows how prices have moved outside of the downward sloping channel. This is a good sign for the bulls. But there is no upward impulsive move. The prices did not even manage to break above 80.65. We remain bearish biased as long as the prices stay below 80.65 with 80.20-80 as target.
