The Dollar index remains in downtrend but has found support above the 76.4% Fibonacci retracement at 80.40-45 which was also a previous consolidation area. If prices continue to trade above 80.40, then the index will increase chances of making another upward move towards 81.
Short-term resistance is found at 80.80-85. Breaking above this level will push prices towards 81.15 and why not 81.30-40. If prices break below 80.40 we will certainly see 80.15 and maybe lower. However, the 80.15-80 area is important support that could decide the intermediate-term trend.
The daily chart shows that the index is trying to make a higher low. This is a bullish sign in case prices reverse from this level. The big bullish test is at 81.40-50. We have talked about this important resistance many times and we are going to repeat it as its of a high importance.Equally important is the support at 80 and 79.75. For now, we believe that it is wise for bears to start taking profits and why not reverse to long positions. Concluding, we believe that long positions should be preferred with the 80.35 stop and the 81.15 target.
