Technical analysis of USDX for May 10, 2016

I believe the Dollar index will make at least a short-term pullback today. Price has moved to new short-term highs confirming reversal and as several indicators show overbought signs, bulls should be very cautious of a pullback today.

The Dollar index has broken out of the 4-hour Kumo in a clear bullish reversal pattern. Stochastic is overbought and diverging. A pullback at least towards the Ichimoku cloud is expected. So a pullback towards 93.50 should follow in the coming few days.

The weekly chart shows the bullish reversal candle of last week and this week's candle is inside the Kumo. Weekly resistance is at 94.50. The upper cloud boundary is at 96.45 and this is my medium-term target if we break above 94.50. Last week's low is very important support and should be used as a stop for Dollar bulls.The material has been provided by InstaForex Company - www.instaforex.com