28.01.201609:55 Forex Analysis & Reviews: USDX technical analysis for January 28, 2016

The US dollar index remains inside an upward sloping wedge pattern. Yesterday, support was tested and prices bounced upwards. I expect the outcome of this pattern to be a bearish breakdown.

The US dollar index is testing the lower channel boundary and the Ichimoku cloud in the 4-hour chart. The price is still in the upward sloping wedge, so we cannot confirm bearish reversal yet. Support is at the critical level of 98.50 and 98.70. Resistance is seen at 99.50 and next at 100.10.

Red lines - upward sloping wedge

The weekly USDX chart contains several points that need to be noted. Apart from the short-term upward sloping wedge (red lines), we have to point out the possible megaphone topping pattern that could give a marginal new higher high, but would sharply reverse. We should not forget that we are still above the weekly cloud, so the long-term trend remains bullish. Weekly tenkan-sen ( red line indicator) is being tested, so as long as the price closes above it, we remain bullish.