10.10.201411:28 Forex Analysis & Reviews: #USDX Technical analysis for October 10, 2014

The Dollar index has showed signs of bullish reversal yesterday as it did not close below the important short-term support of 85. Although the Dollar index broke below 85, the selling pressures were short-lived. The reversal in the Dollar index shows that the pullback was just a shallow retracement of the bigger uptrend and we should be challenging highs soon. Long-term trend remains bullish.

Blue line = support

Red line = price channel

The Dollar index is trying to break above the Ichimoku cloud that was broken on Thursday. The Dollar index remains inside the upward sloping channel as shown in the 4-hour chart above. The previously broken support at 85.50 was re-taken early today and this is a bullish sign.

In the daily chart, the Ichimoku cloud indicators remain bullish. Support at 85 is held but resistance by the kijun-sen at 85.84 should be broken in order for this upward reversal to have a meaning. Last stand for bulls is the 85 price level. As long as price holds above it, we can say that the pull back ended at the 23% retracement. Longer-term trend remains bullish. Yesterday lows are very crucial for bulls. I would not hold a long position if we made a new lower lows relative to yesterday as the index could push lower towards 84.