The Dollar index continues to trade inside the bullish channel providing some short-term bearish divergence signals by the oscillators and is trying to test the 78.6% Fibonacci retracement after breaking above the 61.8% level.
Blue lines - bullish channel
Support is at 98.10 and next at 97.80. Bulls should use these levels as stops. I expect a bearish reversal in the dollar index soon. The reversal could even push below 95, but this for now is an alternative scenario. The primary scenario expects the pullback to move towards 97-96.50.
On the weekly chart things remain bullish with more upside potential shown by the Oscillators. However we did not see any bullish divergence in the oscillators so we could see a new low below 95 and bullish divergence before resuming the up trend. The critical point for this scenario will be if bulls manage to break above 99.80. Bulls for now are in control as they have broken above the tenkan- and kijun-sen levels. A break below 97 will be a bearish sign.The material has been provided by InstaForex Company -
www.instaforex.com
