FX.co ★ #USDX technical analysis for March 20, 2014

Yeswterday, I mentioned in my analysis that there are signs of an expected trend reversal in the dollar index. 79 was important support and I suggested that bulls that believe the low was in should open long positions with the 79.20 stop and target at 80. The dollar index was mainly influenced by Janet Yellen's comments on the monetary policy the FED is expected to follow and dollar strengthened.

More cautious bulls who did not enter long at 79.30 yesterday were given a buy signal once the short-term resistance at 79.50 was broken. The short-term wedge seems to have broken to the upside. The Ichimoku cloud is now broken and all we need is a confirmation above the red trend line resistance for at least one day. The sequence of lower lows and lower highs has been canceled. Trend has reversed.

The daily chart confirms the low at 79.30 is important. Trend in the daily chart has reversed upwards as well. Bulls will need to defend this and I expect this upward move to continue towards 80.50 at least. However, we should always keep in mind that a bigger trend reversal could be starting. Stop for bulls is the recent low at 79.30.