Technical analysis of USDX for July 27, 2016

The US dollar index is holding above the triple top and breakout area of 96.70 despite the pullback we saw yesterday. The dollar index is showing divergence signs, which imply that the dollar bulls should be very cautious.

Blue line - triple top break out level

Red lines - long-term trading range

The dollar index is above the 4 hour Kumo and above the breakout level of 96.70. As long as we are above it, bulls are still alive but more strength and a break above 97.60 is needed. If yesterday's lows are broken we should expect more downside for the dollar index as we will have confirmation of the false breakout.

The weekly candle is testing the upper cloud boundary. A breakout above the weekly cloud will be a bullish sign. The weekly stochastic is about to make a bearish cross and bulls should be very cautious as we are in overbought levels and near resistance levels.The material has been provided by InstaForex Company - www.instaforex.com