The Dollar index continues to trade inside the sideways channel. It remains above the cloud support and I believe we are at a critical juncture. The time is up for bulls that will need to step up now in order for the new upward move to start. Until now, bears have managed to push the index back below 88 each time it broke higher.
Black lines = price channel
The Dollar index has short-term support at 87.50. Price is testing the Ichimoku cloud and manages to close above it. The resistance is found at 88 and 88.35. Bulls will need to hold support but also show some signs of strength in order to start a new upward move. Otherwise, bears will overwhelm this index and push it below 87 eventually. Critical support at 87.15, although I believe that a break below 87.50 will be enough for bears.
The weekly chart remains bullish according to Ichimoku terms but the weekly candle is showing signs of reversal. A weekly close below 87 will be extremely bearish, while a weekly close above 88.20 and near 88.40 will support the bullish scenario and our target of 91 from the two bullish flags.
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