USDX technical analysis for December 17, 2015

The US dollar index gave the first bullish reversal signal ahead of the FOMC meeting by breaking above and out of the downward sloping wedge. When I identified the wedge pattern, I found that dollar's strength was to come back and US dollar bears should be cautious.

Black lines - bullish wedge

Blue line - bullish divergence

A couple of days days ago, I identified the bullish wedge and the bullish divergence in the US dollar index the 4-hour chart. A buy signal would be given once the price broke out of the wedge. After yesterday's FOMC announcement, the US dollar index got very volatile as it usually does in circumstances like this. It was an important day for the greenback. The index pulled back but failed to break below the critical support of 75.

The 50% Fibonacci retracement held very well in the weekly chart after the FOMC meeting, and as we expected the USDX started its next upward journey. Now it is important to break above resistance of 99 and hold above 97.50. As long as the price is above 97.50, we remain bullish on the US dollar.The material has been provided by InstaForex Company - www.instaforex.com