Ichimoku indicator analysis of USDX for February 19, 2016

The Dollar index has broken the short-term upward sloping channel as we expected and is turning lower. Important resistance remains at the 38% Fibonacci retracement which is still not broken upwards.

Blue lines - bullish channel

The Dollar index is now below the Tenkan-Sen (red line indicator) but still inside the Kumo (cloud) and above the Kijun-Sen support (yellow line indicator). Trend is neutral. Bulls are still not able to break above the 38% Fibonacci retracement. This is not a good sign. Breaking below 96 will be a bearish sign and will start a new downward move to new lows.

As we expected, the weekly candle bounced and back tested the broken Kijun-Sen and Tenkan-Sen, but it shows signs of rejection as it cannot break above the Tenkan-Sen (red line indicator). A weekly close back inside the Kumo (cloud) will be a bearish sign, and we will probably see a deeper correction next week.The material has been provided by InstaForex Company - www.instaforex.com