FX.co ★ #USDX technical analysis for October 7, 2014

The Dollar index has broken short-term support and is showing signs of a possible trend reversal. The critical support at 85.50 was challenged yesterday but the daily close did not find the index below that support area. The index is in a short-term down trend that is now testing support at 85.50 and 85.

Green line = price channel

The Dollar index remains in a long-term up trend despite the strong reversal from yesterday. Price is still inside the upward sloping channel and above the Ichimoku cloud. However there are some indications that a break below 85 will signal the start of a bigger downward correction.

The 1st important support level below 85.50 which is the short-term support, is the 85.08 level where the 23.8% retracement of the rise from 79.75 is found. Next important support is the 38% Fibonacci retracement at 84.10. A break below 85 will confirm the bearish reversal towards 84.