Technical analysis of USDX for June 22, 2016

The Dollar index made a double bottom around the 93.35 area and bounced towards 94. The trend remains bearish for the short term after the bearish reversal we saw last week. An important resistance and trend change level is at 94.70.

Red line - resistance

The UK referendum will certainly affect the price and rate expectations for the US. Volatility is expected to spike, and we expect to see big swings in prices. It is hard to predict the outcome of the referendum and thus what the index will do thereafter. Therefore, we prefer to stay neutral and in cash.

On a weekly basis, the price got rejected at the lower cloud boundary, and this is a bearish sign. A huge weekly support is at the 92 price area, where we find the previous important weekly low and the 38% Fibonacci retracement. The result of the UK referendum will be a huge influence on what the index does, and it is best to wait until after the referendum to open positions to follow the trend.The material has been provided by InstaForex Company - www.instaforex.com