Technical analysis of USDX for August 1, 2016

The Dollar index continued towards our targets we gave last week as the downward reversal we saw last week was expected to be deep after the false breakout. The trend remains bearish but with increased chances of reversal this week.

The pullback has reached the 50% retracement at 95.30. A break below that level will open the way for a push towards the 61.8% Fibonacci retracement at 94.77. I believe a short-term bounce will be seen today and followed by a new low to complete the correction.

As expected from last week, price has reached the weekly kijun- and tenkan-sen support levels. The rejection at the upper cloud boundary gave us that signal and the confirmation came once price broke below the cloud. The Dollar index might be making a higher low relative to the June low and is expected to be followed by a new high and uptrend.The material has been provided by InstaForex Company - www.instaforex.com