FX.co ★ Technical analysis of USDX for May 12, 2016

The Dollar index is pulling back lower as we expected in our previous analysis. The Dollar index has made a short-term top and is pulling back. For now the pullback is shallow as price is still supported and we haven't even retraced 38% of the entire rise. So more downside for the short-term is justified.

The Dollar index has made a bearish reversal as we expected. On the 4-hour chart price remains above the 38% Fibonacci retracement. This is also where the Kumo support is found. I expect a minimum pullback towards the 38% Fibonacci retracement but first we could see a double top rejection.

Red line - resistance

The Dollar index got rejected at the red trend line resistance but holds above the kijun-sen (yellow line indicator). A break above the red trend line will open the way for a push towards the Kumo near 95.50. A break below the kijun-sen will open the way for a deeper correction towards 93.10.