Technical Analysis of USDX for April 14, 2016
The Dollar index is reversing upwards as we expected. Bulls were warned that a reversal was coming. Price broke above the downward sloping wedge and now it is turning upwards in an impulsive pattern. Short-term trend is now bullish and this could be a very important turning point for the bullish scenario.
Red line - resistance (broken)
Black lines - divergence signs
The Dollar index broke above the Ichimoku cloud on the 4 hour chart and above the downward sloping red trend line resistance. The trend will be bullish at least for the short-term. The Dollar index made a low at 93.65 very close to our 93 target and long-term important support. The bounce off this level is a very bullish sign as we can see in the following weekly chart.
Blue lines - trading range
The Dollar index reached the lower boundary of the weekly cloud and the lower boundary of the trading range. With stochastic oscillator oversold and the RSI diverging, Dollar bears were warned that a reversal was to be expected. The weekly candle is a bullish one and also a reversal candle so far. If the entire sideways move is finally over, we could be starting the next big leg up towards 110. Learn more about this scenario in the coming weeks.
The material has been provided by InstaForex Company - www.instaforex.com