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03.08.201608:55 Forex Analysis & Reviews: Technical analysis of USDX for August 3, 2016

Long-term review

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The Dollar index remains in a bearish short-term trend making lower lows and lower highs. The index has reached our target area of 95 and we start on looking for a possible bullish reversal.

Blue lines - bearish channel

The Dollar index is still inside the bearish channel, below the 4-hour Kumo and below the 50% retracement. The 61.8% Fibonacci retracement is very important support. Resistance is at 95.50 while support is at 94.75. I believe a final new lower low is the most probable scenario, so we should expect some more Dollar weakness.

The weekly candle has reached the 95 level where we find both the tenkan and kijun-sen levels. A weekly close below these two indicators will not be a good sign for bulls. However I expect that the week will end with a close above at least the tenkan-sen (red line indicator) at 95.25.

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