09.04.201410:58 Forex Analysis & Reviews: #USDX technical analysis for April 9, 2014

I mentioned in previous analysis that since the Dollar index got rejected at 80.60-70 resistance, we should expect the index to challenge the Ichimoku cloud at 80.10 and if broken it would challenge the support at 79.70. Weakness in Dollar has pushed the index lower. The rejection was an important bearish sign that we noted yesterday. Now the index trades just above 79.70 support.

The index has broken the Ichimoku cloud support and has canceled the sequence of higher highs and higher lows. Now we have made a lower low. Short-term trend has changed to down again. Bulls will eed to break above the Ichimoku cloud at 80.15 to reverse trend to up. Important resistance is found at 80.60 and important support at 79.40-20.

The Daily chart is not looking good for bulls. The rejection at the Ichimoku cloud and the broken supportive trend lines increase the chances that the Dollar index is heading towards new lows below 79. Unless we see a break above 80.50 on a daily basis, I remain pessimistic. New lows will come if bulls do not manage to reverse this trend soon and at least make a daily close above 80.15. Trend is down and will change on a daily basis if the index closes above 80.50.