ISM non-manufacturing PMI was announced yesterday. A weaker than expected score for August triggered a big sell-off in the Dollar index and widespread selling of the Dollar. The Dollar index is now testing important medium-term support.
Blue line - support trend line.
The Dollar index has broken below the 4-hour cloud and is approaching the medium-term trend line support at 94.50. As I mentioned yesterday, the Dollar index was range bound and this holds true even now after the sharp decline from yesterday. Price remains above critical support but also below important resistance levels. A medium-term trend is neutral. A short-term trend is bearish.
The Dollar index is testing the weekly trend line support. A break below this trend line will put the previous lows to the test with increased chances of breaking even below 92. The weekly chart shows clearly a weekly rejection at 97.50 and the start of lower lows and lower highs in play. With price being rejected twice by the cloud the chances favor the Dollar to continue its decline. An important trend change level is the 96.50 area.
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