FX.co ★ #USDX Technical analysis for August 27, 2014

The Dollar index confirmed our buy signal yesterday and gave a new high as expected. However, the reversal was a bad sign. The trend line support has been broken and we are close to a full bearish reversal specially if price breaks below 82.30.

Ichimoku cloud support is found at 82.45-82.30. The first sell signal is given by the break of the green trend line. 82.70 is important resistance now. We could have seen the top and a strong downward reversal could have started. Confirmation will come as soon as we break below 82.30.

In the daily chart, price is hitting the upper boundaries of the channel. A pull back towards 81.90 is justified. However, the bigger upward move from 79.75 might be over and complete and we should expect a bigger correction. I prefer neutral to bearish positions. Specially, if 82.30 is broken I prefer to go short as the recent high might be an important reversal point.