The Dollar index remains inside a downward correction towards 84 as it makes lower highs and lower lows. Support at 85 was broken and the index is trying now to retake this level. The downward move reached between the 23% and 38% retracement level and there is still a chance we could see lower levels towards the 38% retrcement at 84.10.
Black line = resistance
Red line= price channel
The Dollar index remains inside the upward sloping channel but below the Ichimoku cloud and below the black trend line resistance. Short-term trend is bearish as long as price is below 85.90. As long as price is below the cloud resistance and the black trend line then we should expect a price fall towards the 38% retracement.
In the daily chart we see the same thing. Short-term trend is down as long as price is below 85.90. Support is found at 84.10 where the 38% retracement is. First we could see a bounce towards 85.30-85.40 and then a pull back to 84. In generall as I mentioned in previous posts, I remained bullish as long as price was above 85. Since 85 was broken I expect the pull back to reach at least 84. I remain neutral now waiting for a buy signal to re-enter the market. This buy signal will come if we break above 85.90 on a daily closing basis.
