Technical analysis of USDX for May 2, 2016

The dollar index continues its downtrend as we expected towards 93. Longer-term support is found at 92.50 and as we have no reversal sign yet we could continue the move lower. Several indicators are oversold and this should raise our awareness and bears should be very cautious.

Black lines - sideways channel

The dollar index remains in a bearish trend after breaking below the sideways channel. The price is below the Kumo confirming the bearish trend. The stochastic oscillator and the RSI are oversold and this is a warning for bears. Our 93 target has been reached so bears should be extra cautious. Resistance is at 93.30 and at 93.90.

The weekly chart shows how the price is testing the weekly Kumo (cloud). The 38% Fibonacci retracement support is at 92.50 and with the stochastic oversold, dollar bears need to be very cautious. The risk reward for being bearish in the dollar at current levels is not worth taking. Being bearish now requires tight stops. The next target is 92.50.The material has been provided by InstaForex Company - www.instaforex.com