Weakness signs from the short term view in the Dollar index continue to put pressure on bulls. As we noted last time, prices were stalling sideways. The 4 hour chart shows that support is broken and the triangle has been breached. We expect more weakness in the short term.
This does not pose an immediate threat for the longer term bullish view as the decline from 81.50 is clearly corrective. However, the correction could continue even lower towards 80.15. Short-term resistance that must be broken for bulls to have a chance is the 81 price level. As long as prices trade below that level, momentum will favor bears.
The daily chart has not changed anything according to the longer term view. The sideways sliding action is corrective but still inside a downward sloping channel. For a new upward move to start, bulls will need to push prices above the black channel resistance levels at 81-81.15. So for now, we remain neutral and enter long only if prices break above 81.15 with 83 as target.
