The Dollar index continued its downward move towards the 78.6% Fibonacci retracement of the rise from 87.50. Trend is bearish for the short-term as price has broken below the Ichimoku cloud. Bulls are still alive as long as price is above 87.50. A bounce from current levels will be a bullish signal with new highs as target.
Support is at 87.50. The long-tailed 4-hour candles from the 78.6% retracement are a bullish sign, but bulls also need to break above 88.57. Making a new lower low below 87.90 will be a bearish sign that will put the low at 87.50 in danger of being broken.
The weekly chart is also not showing any strength, even the opposite. The big red candle is a bearish reversal signal, however, we still have two more trading days left until the end of the week. Bulls also have this time to push the index higher as they did two weeks ago. It is important whether we see an upward reversal or break 87.50. For now bulls continue to have the upper hand and, I believe, this pull back is another opportunity to go long with the stop loss level close by at 87.50. Next target is 91 as long as our stop is not hit.
The material has been provided by InstaForex Company - www.instaforex.com
