03.07.201315:35 Forex Analysis & Reviews: Has Dollar Index topped?

Long-term review

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The Dollar Index is pulling back down after buying interest in EUR/USD has raised prices from 1.2923 lows to 1.2960. Additionally, the decline in the Index is also influenced by the selling pressures in USD/JPY that has reversed from 100.86 to 99.40. The index is now trading near 83.42 just above its short-term support.

For bullish trend to continue, prices should not fall below 82.95. However, it is most probable for the index to find support between the 50% and 61.8% Fibonacci retracement as shown above. These levels are the most probable for a short-term bottom. Moreover, the 34 candle MA is also supporting prices at the 83.40 level. Our view is that we could see the support levels being tested and the upward trend to resume once again.

Long positions for the short term are favored. The stop loss should be the 82.95. If that level is broken, the short term sequence of higher highs and higher lows will be disrupted. If we are correct about the bullish potential, the short-term target for long positions will be 84.20-45 level. If not, we are going to get stopped at 82.95.

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