The Dollar Index is to our 80 target by reaching 80.12. The index remains in downtrend, despite the upward bounce towards 80.40 that it made earlier today. Prices are moving down in an impulsive pattern and this places our next target at 80 or below. We remain bearish as long as prices trade below 80.65.
The bearish flag that we mentioned in the previous posts has broken downwards but also made a couple of back tests that got rejected at the resistance of 80.65. We expect prices to continue lower after the double rejection.
The lower lows and lower highs as shown in the 1-hour charts confirm that the trend is down and as long as prices trade below 80.65 it will remain like this. Therefore, the next target is at 80 or slightly below that level after today's upward bounce. A break above 81 could change a lot regarding both our short- and longer-term view on this index. If 81 is broken upwards, then the longer-term trend could again change to upward. For the time being we remain short as more Dollar weakness is expected.
