The Dollar index remains inside the long-term upward sloping price channel but the short-term trend has reversed and a pull back has started. Price is trending lower with lower highs and lower lows. Support at 84 is the first big test for Dollar bulls.
Price remains below the Ichimoku cloud in the 4 hour chart so trend remains bearish. The bounce off the lower channel boundaries should be short-lived as price is expected to find strong resistance at the downward sloping Ichimoku cloud near 85.50. The rejection expected at that area should push the Dollar index towards 84 to complete the downward correction.
In the daily chart we see the downward reversal unfolding and price remains below the resistance trend line while the tenkan-sen is about to cross the kijun-sen which in Ichimoku cloud terms this is a bearish signal. This could signal the final push towards the 38% retracement or even lower towards the cloud support at 83.70. In generall I believe the longer-term trend will remain bullish and since the Dollar index has broken out of important weekly and monthly resistance levels, any pull back should be seen as a buy opportunity.
