FX.co ★ USDX technical analysis for February 15, 2016

The US dollar index has broken the downward sloping channel however the reaction is not as strong as one could expect. Nevertheless, we remain bullish on the US dollar as I have been pointing out since last week to the impeding dollar bullish reversal.

Blue lines - bearish channel

The US dollar index has broken above both the tenkan- and kijun-sen indicators. Resistance is now seen at 97.25 where the 4-hour cloud is found. Support is seen at last week's low. I believe we should see the dollar breaking out higher today and over this week.

The previous week's candle closed inside the cloud and below both the tenkan- and kijun-sen indicators. This week I expect a backtest of these resistance levels, so a bounce is coming. The result of the backtest will give us more information on whether the decline has stopped and the longer-term uptrend resumes or we are going to see a deeper correction towards 92.