The daily reversal from the 81 price level was a very bearish sign for the trend in the Dollar index. Price has broken support levels as we explained in our previous analysis last week and is now preparing for a downward move. So we expect the Dollar index to be pushed below 80.
Short-term support is found at 80.35-80.25. This is the previous short-term low and the Ichimoku cloud support in the 4 hour chart as shown above. This is also the 38% Fibonacci retracement. I expect to see the index break those lows and move lower towards the 61.8% Fibonacci retracement. Short-term resistance is found at 80.70.
The daily reversal candle as shown in the Daily chart above is a very bearish indication of what we should expect. It is very similar to the bullish indication we were given at the bottom of this move with a similar daily bullish reversal candle just below the 79 price level. I expect the Dollar index to push lower towards the 79.75 longer-term support area. I'm bearish as long as price is below 81.
