FX.co ★ Technical analysis of USDX for November 10, 2016

The Dollar index made a big reversal to the upside yesterday following the back test of the 96.50-96 breakout area. I was not expecting such a strong bounce but at least we got the pullback. The trend is short-term and medium-term bullish as price has held above the critical support.

Short-term support is at 98 and next at 97.40. Resistance is at 99-99.10. Price has stopped its rise at the 88.6% Fibonacci retracement which is the last Fibo level of resistance. The chance of a new high above 99 has increased but the longer-term outlook

for the US dollar remains bearish.

Red lines -important medium-term support

The Dollar index backtested successfully the Ichimoku cloud and the green trend line support. The bounce is a bullish signal implying that new high may be close. However, strong resistance remains at 99-99.50 area. Even if we make a new high, I would expect the index to reverse again. I remain bearish about the US dollar, expecting a move below 92. This scenario will be confirmed only with the break below yesterday's lows.