FX.co ★ #USDX Technical analysis for October 2, 2014

The Dollar index made a pull back yesterday towards our support of 85.50 but support was held. Now trading near 85.80 I believe traders should be very cautious as the ECB is holding the meeting today and everyone is waiting for Mario Draghi's speech. This speech is expected to bring some volatility in the FX markets.

In the daily chart as shown above, the trend remains bullish. Price remains inside the upward sloping channel and is fully bullish according to the Ichimoku cloud indicators. Critical daily support is found at 85. Breaking below it will push the index out of the upward sloping channel. This could be the reversal signal many have been waiting. If a correction starts, we could see the index fall towards 84 or even 83.

As the weekly chart points out, long-term trend remains fully bullish and is very strong. Betting against this trend is not advised. The best strategy is to raise stops for long positions in order to protect profits. Betting against this trend is not advised. Next upside targets are 87-89.