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

The Dollar index continues its decline as we expected and promptly called for a reversal at 98.50-99. Price has also broken critical short-term support confirming the trend reversal at 99 and is now pulling back to test 96.50 which is a breakout level.

Green line - bullish channel (broken)

Red line - trend line support

The first bearish signal came with price breaking out of the bullish channel. The second warning came with the bearish divergence in RSI. The third bearish signal came when price broke down of the Ichimoku cloud on the 4-hour chart. Trend is bearish and the downward move has just started.

Price has broken below the low of the previous two weeks. Last week's candle was a bearish reversal signal. Combined with the fact that price was very close to the upper trading range boundary with bearish divergence in the Stochastic, last week I was warning bulls of a reversal. I remain bearish expecting at least 96.50 to be tested.