FX.co ★ USDX technical analysis for August 27, 2015

The US Dollar Index continued its upward bounce towards the 61.8% retracement, and I believe that bulls should be very cautious as we could see a bearish reversal soon. I believe it is more probable now to see a reversal towards new short-term lows in order to complete the bullish flag before the resumption of the long-term bullish trend.

The US Dollar Index is below the Ichimoku cloud resistance and has already been rejected at the 61.8% retracement. Support is found at 94.50 where we the tenkan-sen (red indicator) is found. Breaking below this support will accelerate the selling pressure.

Red line - resistance

Green line - support

Although I see a bullish flag being formed here, I believe the short-term upside is limited. We should see a push towards lows near 92. Then, the index is likely to resume its longer-term uptrend towards new highs. This scenario will be canceled if we break above the red line first.