USD Trades Above 96.70 Breakout Area
Alexandros Yfantis | Jul 22, 2016 06:07AM ET
The dollar index is trading above the breakout area at 96.70. The price came back down to re-test the breakout area after being rejected at 97.30, where the longer-term upper channel boundary is found. As long as the price is above the consolidation area and the breakout level of 96.70, bulls still have hopes of another strong upward move.
Blue lines - trading range
Red line - upper boundary of bullish long-term channel
The dollar index is trading above the 4-hour Kumo (cloud) and is holding above the 96.70 breakout level. Resistance is at 97.30, and a break above it will confirm the breakout and push the index towards our target of 97.70. Bears want to see the price get rejected and break back inside the trading range.
Red line - resistance (broken)
The dollar index is in an upward trend after breaking above the downward sloping trend line from 100. Bulls have managed to hold the price close to the weekly cloud and back inside it.
The dollar index remains in a big trading range since March of 2015, when it topped. This yearly consolidation could very soon be over with a breakout above or below the trading range of 100-92.
Current price action favors bulls and increases the chances of an upward breakout as long as the price is above 96.30. A break below it will be a bearish reversal sign.
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