The Dollar index made a strong reversal yesterday and as I warned, breaking below 85 will be bearish for the Dollar and will start a bigger downward correction towards 84. Breaking below 85 puts Dollar bulls on the ropes as bears take control. The bigger trend remains bullish and we remain positive over the long-run.
Red lines= price channel
The Dollar index is still inside the downward sloping channel but has broken below the Ichimoku cloud. The Dollar index has also broken below 85 and as I said yesterday,this means we are heading towards the 38% retracement and 84.
In the daily chart the Dollar index has broken below the Kijun-sen and this means that our first target is the 38% retracement and if this support does not hold, we should not be surprised to see the Dollar index fall towards the Ichimoku cloud near the 83.50-83 price level. Short-term trend is bearish. I warned yesterday that breaking below 85 is not a good sign for bulls. A good sign for bulls and a bullish buy signal will be if price breaks above 86.
