FX.co ★ USDX technical analysis for February 26, 2016

The US dollar index has reversed as we expected at 50% retracement braking below the bullish channel. I warned bulls yesterday that they should be very cautious as there were signs of an approaching bearish reversal.

Blue lines - bullish channel

The price got rejected at the 50% retracement and is pulling back towards the Kumo (cloud) support at 96.80. Next support is seen at 96.20. Resistance is seen at 97.70-97.90. If is gets broken, we will go to 98.10-98.80. If support fails, we are going to test 95.80. At this point, I believe it is very difficult to break below 96.80.

The weekly candle got rejected at the tenkan-sen (red line indicator) and is now testing the kijun-sen (yellow line indicator). A weekly close below 96.80 will be a very bearish candlestick pattern that would imply more selling pressures. It should be expected to head towards 96 at least.