24.01.201412:28 Forex Analysis & Reviews: #USDX analysis for January 24, 2014

Yesterday we noted in our analysis how important is for the short-term trend the fact that the Dollar index has broken the upward sloping purple trend line. We noted that important support was 80.40 and the index has reached it.

The rejection at 81.50 was a bad sign for bulls as we mentioned in previous posts and breaking below the trendline was the second sign that a reversal was to take place. Short-term support is found at 80.40 and if broken we could see the index move towards 80.10. Short-term resistance is found at 81.

The daily chart of the Dollar index continues to show that once the trend line is broken, a correction is underway. Support is found at 80.10 where the purple trend line is found. Currently, the index is battling around our MA to determine trend. As long as the index trade above 79.70-80.10 we remain slightly positive. We will confirm our bullish view if prices break above 81.30-81.50 and will place a target at 82.50. As long as prices trade below 81.50, we remain sceptical regarding any positive turn around.