FX.co ★ #USDX Analysis for September 12, 2013

Trend remains down in the Dollar Index and still we remain neutral as no bullish sign was given yesterday. Prices have now reached the 61.8% Fibonacci retracement as shown in the cahrt below. This price level was our second target for a possible bottom and end of the decline from 82.67.

Short-term support is found at 81.40 and 81.20. Short-term resistance is found at 81.65 (downward sloping blue trendline) and at 81.80-95 (the previous sideways consolidation). Chances for a bottom near 81.50 have increased and we are looking to find the first bullish signal. This will be a break above the downward sloping trendline, a back test of the break out and a new higher high to confirm the breakout.

In the daily chart, prices will need to break above 82.40 resistance and the 82.67 high in order for 84.50-85 to be a feasible target. Breaking above those levels could lead to another upward big leg that will challenge the previous top at 84.75. Breaking below support at the 81 level could put in danger the longer-term upward sloping trend channel. This can be clearly seen in the chart below.

Concludin we remain neutral to bearish as trend remains down, but there is increased probability for a trend reversal as prices trade close to longer- and intermediate-term support.