Despite finding support at 85 and starting an upward bounce, the Dollar index did not manage to close above the tenkan-sen resistance at 85.85. The downward correction that started at 86.75 may be incomplete. Breaking below 85 will imply a move lower towards 84.20
Blue line= support
Red line= price channel
Although, the Dollar index remains inside the bullish upward sloping price channel. Price however is below the Ichimoku cloud in the 4 hour chart. This implies short-term trend remains bearish as price did not manage to break above the cloud resistance. The decline frm 86.75 is corrective and the bigger correction may still be incomplete as long as the index remains below the cloud. Resistance at 85.85 and 86 is critical. Bulls will regain the upper hand if price breaks above 86. This would be a good buy signal with 85 stop and 86.75 1st target and 87.17 2nd target.
In the daily chart as shown above, the Dollar index could not manage to break above the tenkan-sen at 85.85 and got rejected on Friday . I mentioned last time that bulls needed to break above that resistance to regain control. Control is still in the hands of bears that will try to push the index below 85. Breaking below the 85 support will push the index towards the 38% retracement and the Ichimoku cloud around 84.
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