FX.co ★ Technical analysis of USDX for June 2, 2016

The dollar index has broken below the bullish channel. As expected, the dollar is weakening and sellers put pressure on the index. The price should continue lower over the coming days as a correction at current levels is justified.

Blue lines - bullish channel

The Dollar index is testing short-term support by the Kumo (cloud) at 95.25. The 95.25-95 area is an important short-term support area, so a break below it will open the way for a move towards at least 94.40 where the 38% Fibonacci retracement of the entire rise is found.

On the weekly chart, we see the weekly candle get rejected at the kijun-sen weekly resistance (yellow line indicator) as initially expected. This is an important support, and in order for dollar bulls to break above it, a pullback to gather strength is needed. The longer-term view remains bullish as long as the price is above 92. However, this is the place where bulls should cover their longs and protect themselves.