Ichimoku indicator analysis of USDX for May 18, 2017

The Dollar index has reached important weekly support levels around 97.50-97 as we expected from our previous posts. Now it is time to look for reversal confirmations and trade the long side of the index as I believe a strong bounce will follow soon.

Trend remains bearish on the 4-hour chart but oscillators point to a bounce starting that I believe could be of a larger degree that can bring price back towards 99 at least for a backtest of the broken cloud support. 98.50 is the first important short-term resistance.

Red line - resistance

Green line - long-term trend line support

As expected the Dollar index has reached the Weekly Kumo (cloud) at 97.50. This is very important weekly support and combined with the oversold levels of the RSI, I expect a bounce back at least towards the green trend line which is now resistance. If I was short, I would cover or protect my profits now. I prefer long positions around these levels for a bounce towards 99-100.

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