The US Dollar Index reversed lower as expected. There were signs of a pending reversal a couple of days ago as the extended rise in the US Dollar Index was reaching important resistance levels. The area around 93.10 is of great importance for the bullish scenario. I believe that the pullback will help the price reach 96 and the uptrend will resume. I remain neutral for the short term.
The US Dollar Index is above the Ichimoku cloud in the 4-hour chart. The trend is bearish in the medium term. In the short term, we expect some weakness that could bring the index towards the 38% retracement of a rise from 93.10 that coincides with the 61.8% retracement of a rise from 94.80. This level is at 96. The area between 96.60 and 96 is important short-term support.
In the daily chart, the US Dollar Index paused its rise right at the lower cloud boundary resistance. The index is expected to pullback towards the black area of support, which used to be a resistance level. So, this back test should bring the index towards the area of 96.50-96.
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