Technical analysis of USDX for December 8, 2016

The Dollar index got rejected at the resistance of the 38% Fibonacci retracement as we mentioned yesterday. Price has pulled back down towards its recent lows. Volatility is expected to rise today as the ECB meeting could provide valuable information that will mainly influence the major component of the Dollar index, the EUR/USD pair.

The Dollar index is below the Ichimoku cloud on the 4-hour chart. A bounce towards the 61.8% Fibonacci retracement is very possible if the recent low and support at 99.80 is not broken. Price could bounce today after the ECB President speaks with a target to reach the Ichimoku cloud for a backtest.

Black line - resistance

Green line - support

The Dollar index could have made a false breakout above resistance. Price is turning back downwards. This however could still be a back test and a corrective pull back so Dollar bulls could get more power for the next upward move. Bulls remain in control as long as price is above 96-96.50. Bears need to confirm the fake breakout and move towards 96 and break it. Otherwise the possibilities for a new high are real and more than that of a breakdown below 92.

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