The US dollar index has broken the short-term triangle pattern and short-term support at 95.20 and is moving lower. The short-term trend is bearish. The longer-term bullish flag pattern is still valid as the price continues to trade within a big trading range where we prefer to stay neutral.
Green line - support
The US dollar index was rejected at the resistance a few days, and I would turn bullish only if we break out above 96.60. I preferred to stay neutral. The price has moved towards the lower triangle support at the green trend line where we first saw a bounce and the second time we broke below support. The price is also below the Ichimoku cloud therefore bears remain in control.
Red line -weekly resistance
The US dollar index is testing the weekly Ichimoku cloud support. The price remains inside the bullish flag trading range. The long-term trend remains neutral. However, the stop level for any long position should be at 92.70 (June's low). Will the cloud support hold the decline and produce a bounce? More aggressive traders could try long positions with stop at 94 or 94.50. A bounce from this support area can be justified. More defensive traders should wait for a breakout of the flag.
