The Dollar index bounced as expected but the price got rejected at the upper channel boundary and at the kijun-sen. Price is vulnerable to a new lower low but I still expect a bounce higher towards 100 as there are bullish divergence signs in the charts.
Blue lines – bearish channel
The Dollar index did not manage to break out of the bearish channel and the kijun-sen (yellow line indicator). The trend remains bearish but with the oscillators diverging the next big move will be to the upside. The downside is limited as price continues to hold the 99-98.80 support area.
Red line – resistance
Black line – support
Green line – long-term support trend line
Black line – support
Green line – long-term support trend line
We expect the price to eventually bounce strongly off the green long-term trend line. I expect the red trend line to be re-tested. I would not be bearish the Dollar at current levels. I expect a strong bounce in the Dollar index. This bounce is most probably going to be affected by EUR/USD and GBP/USD.
