USDX technical analysis for February 2, 2016

The Dollar index has reversed lower as expected. Price made a turn to the downside but dollar bulls remain in control of the larger trend. Huge support is at 98.50, while resistance at 100 remains strong.

The bearish divergence I noted in my previous post has provided a nice reversal signal as prices turned lower today towards the daily Ichimoku cloud and below the daily tenkan-sen. Price remains trapped inside the 98.50-100 range. So as long as we trade inside this range, traders should be neutral.

A bullish sign is the fact that the decline today stopped at the 61.8% Fibonacci retracement of the rise from 98.44. This level is important support and as long as we hold above it, bulls remain under control of the trend.

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