The US dollar index has reached an important resistance area and a pullback is justified at current levels. Bulls should be very cautious in case the index makes full bearish reversal.
Red line – resistance
The US dollar index is trading above the Ichimoku cloud. It has already broken the previous high of 96.50. A rejection at the resistance line of 97.25 could push the index back towards the Ichimoku cloud support at 95.50.
Red line -weekly resistance
Green line -weekly support
The USDX bounced from the Ichimoku cloud towards the upper bullish flag boundary and we can see a rejection. It is still too early to get bearish, but this is the level with the best risk-reward ratio. Stop for short positions is very close and a pullback towards the weekly cloud support is justified. Bulls should be very cautious and raise their protective stops.
The material has been provided by InstaForex Company – www.instaforex.com