The Dollar index bounced yesterday towards the upper channel boundary but got rejected and reversed lower making a new lower low. The trend remains bearish. No reversal sign yet, although bullish divergence signs are there as a warning for bears to be cautious.
Blue lines – bearish channel
The Dollar index is making lower lows and lower highs. Resistance is now at 94 and next at 94.30-94.90. Support is at 93.15. The trend is clearly bearish. A break above 94.30 will be the first important signal of a dollar reversal.
Green rectangle – long-term support area
The Dollar index has reached the long-term support area between 92-93. We could make new lower lows, but a strong bounce is justified. Daily resistance is found at 94.20, next at 95.40 and finally at 97. If the Dollar index reverses from current levels, 97 is my preferred target area.
The material has been provided by InstaForex Company – www.instaforex.com