24.08.201610:21 Forex Analysis & Reviews: Technical analysis of USDX for August 24, 2016

The Dollar index held above the critical support level of 94-94.20 I mentioned yesterday and seems to respect this level. Could a bigger bounce come from this area? Yes and confirmation will come with the break above 95.30.

Red line - resistance

Short-term support is at 94.20 and resistance at 95.30. A bounce towards the red trend line resistance is very possible over the next couple of days. This will be the crucial test for Dollar bulls. A break out above the red trend line will re-energize the bullish trend and will put 97 to the test. A rejection will most probably bring the index below 94.

Price is holding above the green trend line support and this implies that a bigger bounce could come very soon if price manages to break above short-term resistance at 95.30. A weekly break below 94.20 will open the way for a deep correction towards 93 at least. Trading below the weekly Kumo is a bearish sign and staying below both the tenkan and kijun-sen indicators is also a bearish sign. Bulls need to act this week otherwise we will see a big sell off in the Dollar index.