The Dollar index made a pullback yesterday but held above short-term support and the recent low at 97. Dollar bulls are trying to push the index higher once again however there is strong resistance at the current trading level. If the index manages to push above 99.80, we will get confirmation of a new upward move towards 102-103.
The Dollar index is testing the Ichimoku cloud in the 4-hour chart shown above. The tenkan-sen support is at 97.86 and the next one is seen at 97.70. Unless the Dollar index breaks above the cloud support at 97 and previous low will be tested. Bulls need more signs of strength. In general, it seems more possible that we are in a sideways corrective pattern after a huge rally before resuming higher. So, more consolidation is very possible.
The weekly chart remains fully bullish. The price remains inside the orange upward sloping channel and weekly candles are above the red line tenkan-sen indicator support. We are experiencing a sideways consolidation pattern that could last at least one more week before we see a new trend starting. Critical support is at 96 for the longer-term bullish trend while we find the resistance at 100 that bulls need to break in order to make a move towards 102-103.
The material has been provided by InstaForex Company - www.instaforex.com