Technical analysis of USDX for May 3, 2016

The Dollar index remains in a bearish trend and has already reached our 92.50 target we mentioned yesterday and moved even lower as its major component, the EUR/USD, is rallying above 1.15. The trend is bullish but Dollar bears should remain on high alert and use tight stops.

Black lines - sideways channel broken

The Dollar index remains below both the tenkan- and kijun-sen indicators and, of course, below the Kumo (cloud). The trend remains bearish. The RSI and stochastic are oversold signaling that the bears should be on high alert and use tight stops. Our 92.50 target was surpassed. The price has reached important long-term support as shown on the weekly chart below.

The Dollar index has broken below the weekly Kumo (cloud) and this is a worrying sign for the longer-term trend. However, the price has reached important long-term support of the 38% Fibonacci retracement of the rise since 2013. The medium- and short-term trends are bearish. However, this decline could be part of the bigger sideways consolidation since 2014 before the last upward breakout.The material has been provided by InstaForex Company - www.instaforex.com