Technical analysis of USDX for November 7, 2016

The US dollar is strengthening as expected. Last week I said that it was time for the dollar index to bounce to form a countertrend against the downward move that has started. This bounce is expected to be short lived.

Black lines - bearish channel

The Dollar index had broken out of the bearish channel last Friday and was trading on top of the upper boundary. Today we saw prices gap up higher towards the kijun-sen resistance (yellow line indicator). Price remains below the Ichimoku cloud on the 4 hour chart. I expect the cloud area to be tested.

On a weekly basis prices have reached the 38% Fibonacci retracement already and this week's candle is promising for some more upside at least for 2 more days. I do not expect the dollar index to make a higher high. It is likely to make a lower high and reverse. The 98-98.30 area is very possible to be the lower high area.The material has been provided by InstaForex Company - www.instaforex.com