08.07.201411:27 Forex Analysis & Reviews: #USDX Technical analysis for July 8, 2014

Long-term review

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The Dollar index is making a bullish flag pattern. The sideways consolidation after the sharp rise from our reversal level of 79.75 is the flag. This is also shown in the chart below.

The Dollar index is above the red downward sloping trend line resistance that was broken and above the Ichimoku cloud. Support is at 80.20 and resistance at 80.30-80.35. A break above resistance could push the Dollar index towards 80.50-80.70. The trend has reversed at 79.75 as we expected. This could turn out to be a longer-term price reversal. It is important for bulls to hold the index above 79.90.

The bounce off 79.75 and the Ichimoku cloud is unfolding as expected. Now, bulls need to break above 80.60 resistance (61.8% Fibonacci retracement of the decline from 81 to 79.75). I remain bullish targeting at 80.60 for the short term.

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