The Dollar index is trapped inside a trading range. Last week, I favored a pullback towards 95 in order to try a bullish setup as price remains above the 4-hour cloud support and the weekly chart supports the view of a continuation of the uptrend.
Short-term resistance is at 96.50 and support is at 95. Critical support is seen at 94.50 and a break below it will cancel any chance for a move towards 97 and higher. A rejection and reversal at the current levels will increase the chances of the creation of a lower high and a possible right hand shoulder. That is why the 94.50 level is of critical importance. Both a neckline and a trend line support.
This week's candle has opened below the tenkan-sen (red line indicator). A pullback towards the green trend line support will not be a good sign. Price is below the weekly Ichimoku cloud. A break below the green trend line will a big bearish signal. This will put the 92 level to the test. This will also signal that a lower high is in place confirming bearish weekly trend.
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