The Dollar index had a very volatile day on Friday. Just before and after the NFP announcement volatility rose as we initially saw a deep decline towards short-term support at 97.60 and then a move to new short-term highs above 98.20. However the signals at the end of the day did not favor Dollar bulls.
Green line - support
The Dollar index continues to trade between the two trend lines as shown on the chart above. Although price remains above the Ichimoku cloud (which is a bullish indication), the fake breakout we saw on Friday was not a good sign for Dollar bulls. This fake breakout might be the start of a bigger trend reversal to the downside. This will be confirmed when and if we break the green upward sloping trend line and fall below the Ichimoku cloud.
Green line - weekly trend line support
The weekly chart in the Dollar index shows how price got rejected at the upper triangle boundary. However price remains above the weekly kijun-sen (yellow indicator) Bulls are still in control of the short-term trend as long as price is above 96.80. However they are also trapped inside the triangle pattern and are in danger of making another move down towards the lower triangle boundary at 95-94.50. Overall the longer-term trend is neutral as long as price is inside the triangle. Short-term traders could take advantage of the triangle boundaries for short-term trading.
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