The US dollar index has been trading sideways for some time now and still holding above the trading range support at 98.40-98.50. Resistance at 100 is still not broken, so I believe the market is waiting for some direction from the Fed.
The price is now below the Ichimoku cloud in the 4-hour chart but still inside the trading range between 98.40 and 100. The price is also trapped between the 61.8 and 78.6% Fibonacci retracement of the recent rally. A trend is clearly sideways and there is no need to take unwarranted risks trying to guess what will happen next. Patience is needed to wait for a clear breakout signal to be given.
Red lines - bearish divergence signs
Yellow lines - projection if support fails
In the daily chart, the price is still above the cloud and above the horizontal support of 98.40. If this support fails to hold we should expect the price to move at least towards 97.10. Resistance is at 99.10 for the daily chart and next at 100. Traders should better wait for a breakout before opening any position.
The material has been provided by InstaForex Company - www.instaforex.com