USDX technical analysis for January 6, 2016

The US dollar index made a new short-term high, but I believe we should prepare for some dollar weakness over the coming days. Resistance is at the 99.80-100 area and I expect to see a rejection in this area.

The US dollar index is above the Ichimoku cloud implying that bulls control the short-term trend at least. Support is at 99, while resistance is at 99.80-100. The upward bounce of the 97.20 area is corrective to me so I would expect another round of selling pressure to push the index to new short-term lows below 97. Support by the Ichimoku cloud is at 98.

The weekly chart remains fully bullish as the price is above the weekly cloud and above both the tenkan- and kijun-sen indicators. However, my view is that this week, the most probable outcome will be to see a downward bearish reversal in the dollar as a part of a bigger correction that will bring the index towards 96.50. The market is still inside a bigger sideways movement and I prefer to be neutral for the dollar.The material has been provided by InstaForex Company - www.instaforex.com