Technical analysis of USDX for May 17, 2016

The Dollar looks like it has run out of fuel and needs to see some selling before another attempt to the upside. The Dollar index is breaking below the black trend line support and this implies more short-term weakness ahead.

Black line - trend line support

Short-term support is found at 94.2 and at 94. The stochastic and the RSI are downward-sloping coming from overbought levels. Some more downside should be expected for the Dollar index.

On the weekly basis, the Dollar has a lot of potential to the upside as long as we hold inside the Kumo. The price is above the tenkan-sen (red line indicator) and is now re-testing the cloud boundaries. The stochastic is turning upwards from the oversold divergent area, and this is another sign that pullbacks should be bought. So short-term weakness is possible but the longer-term outlook remains positive.The material has been provided by InstaForex Company - www.instaforex.com