The Dollar index got rejected at the resistance area yesterday and is pulling back down towards the support at 93.50. The dollar index remains inside a trading range. Therefore, the trend is neutral. However, the longer-term trend remains bullish with 100 as a possible target if we break above 96.
Green line = resistance
Blue line = support
The dollar index is trading sideways between the important support and resistance levels as shown on the 4 hour chart above. The trend is neutral as the dollar index trades around the Ichimoku cloud. Bulls need to break above 95.30 and bears need to break below 93.40. Short-term traders should better wait for a signal before trading or open positions in favor of the trading range. In other words, opening longs near support and short positions near resistance with a stop reverse strategy.
On the daily chart the dollar index has broken below the tenkan-sen and unless we close above it today, we should expect a push lower towards the kijun-sen (yellow line). The longer-term trend remains bullish.
