USDX technical analysis for January 29, 2016

The US dollar index broke an upward sloping wedge downwards as expected, but renewed dollar strength after the BOJ announcements has pulled the index back up to test the broken support and cloud resistance.

Red lines - upward sloping wedge

The US dollar index has broken below 98.80 cloud and wedge support, but now it is bouncing back up towards the Ichimoku cloud resistance that was support. This back-test could be a final chance to go short on the dollar index. As long as the price is below the cloud, I would remain bearish.

The US dollar index has reached the level of 98.44 yesterday, so a breakout below that low will confirm the bearish reversal and that we are heading towards 97 at least if not lower. The price is testing the weekly tenkan-sen on the weekly chart as shown above. Today's close is important.The material has been provided by InstaForex Company - www.instaforex.com