The Dollar index tried to bounce yesterday for new highs but got rejected. The pullback so far is shallow. A trend remains bullish but bulls need to be very cautious in case price breaks below 100.65 as then we will have a confirmation of a short-term trend change.
The Dollar index retraced back to the 78.6% of the recent decline and got rejected. Price is trading around the Icimoku cloud that has turned red and this is another worrying sign that we might see another pullback down towards 99 for a lower low.
Red lines - megaphone pattern
Green line - trend line support
The Dollar index is fighting at the upper trend line resistance of the megaphone pattern. As long as price is above 97.50 bulls remain in control. A break below the Ichimoku cloud and the trend line support at 96-96.50 will be a confirmation of trend reversal on a weekly level pointing to a downward move targeting below 92.
The material has been provided by InstaForex Company - www.instaforex.com