The US dollar index is inside the upward sloping channel and is testing the lower channel boundaries. In the Ichimoku cloud terms, the price is in a bearish trend and has given a new short-term sell signal by breaking below the cloud. The US dollar is showing some signs of strength and is trying to bounce from the lower boundaries of the channel.
Black lines – bullish channel
The US dollar index is in a short-term bearish trend as it makes lower lows and lower highs since July 21. The price has broken below the kijun-sen and tenkan-sen support indicators and now is trading below the Ichimoku cloud. Bulls are trying to push the price back inside the cloud. The bullish channel is intact for now; and as long as the price remains inside this channel, bulls will be in control. Critical support is at 96.30. This recent low is also the 38% retracement of the rise from 93.60.
Blue line – horizontal resistance
The US dollar index got rejected at the horizontal resistance at 97.80 and pulled back towards the kijun-sen and tenkan-sen. Support is crucial in this area and a bounce will increase the chances of a real breakout above 98. A weekly close below 95.80 could be a sign of more selling to come towards even the weekly cloud support at the 91-90 level. Important day for the US dollar is tomorrow as the FOMC meeting will be held.
The material has been provided by InstaForex Company – www.instaforex.com