The Dollar index continued the downtrend to new lower lows yesterday closer to our 96.50 target and critical support. Several short-term indicators are oversold, so we could see a two-day bounce and Dollar strength.
Bullish divergence signals by the oscillators are given on the 4-hour chart. Price should start a bounce soon towards the upper channel boundary near 97.60-97.70. I remain medium-term bearish about the Dollar index as I believe an important high was made above 99. The best case scenario for Dollar bulls is to break the bearish channel and reach the Ichimoku cloud at 98.30 and get rejected there.
Green line - trend line support
The weekly chart remains bearish implying that the downtrend has just started. I see any bounce as an opportunity to sell again the Dollar index as I expect the green trend line support to be tested and broken eventually. A break of the green trend line support will increase dramatically the chances of pushing below 92.
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