Wave after wave, the USDX was producing higher highs and higher lows up until December 3, 2015, when the price fell sharply. After the drop, the price consolidated for over a month and finally on January 7, 2016 the Dollar Index broke below the ascending channel.
Fibonacci applied to the channel breakout point shows that after the breakout, the price rejected R2 (61.8%) with the spike and closed below R1 (50%). In addition, after the channel breakout, the price broke below the S1 (38.2%) support. Overall, it seems that another corrective wave down is coming.
Consider selling the USDX while the price is near R1 (98.70), targeting the S3 (96.90) support area that is the final Fibonacci target based on the channel breakout point.
Support: 98.26, 97.74, 96.88
Resistance: 98.70, 99.12, 99.65
