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05.12.201610:25 Forex Analysis & Reviews: Technical analysis of USDX for December 5, 2016

Long-term review

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The Dollar index opened very strongly today as its main component, the EUR/USD pair, was under selling pressures after the Italian referendum. However Dollar strength has weakened substantially gradually and most of the gains are lost at the European open.

Blue line - support

The Dollar index has bounced off the important 100.65-100.70 support level which it held on Friday. Oscillators are overbought and turning lower. The long-tailed candle being formed on the daily chart is a bearish sign. Trend change confirmation will come once price breaks below 100.65. Resistance remains at 101.50.

Green line - long-term support trend line

Last week's weekly candle is a bearish reversal candle. However, traders need to be patient as this week's candle is promising a lot of volatility this week. A weekly close below 100.60 will be a bearish sign that should push the index towards the long-term important support green trend line. As long as the Dollar index is above the weekly cloud and the green trend line bulls remain in control.

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