FX.co ★ USDX technical analysis for January 5, 2016

The US dollar index held above the support at 98 yesterday and made an upward reversal towards 99. This is a sign of the dollar's strength. However, we are again close to critical short-term resistance where the index got rejected twice. Will there be a third time?

Blue line - trend-line support

The US dollar index has once again reached the 61.8% Fibonacci retracement of the decline from 100.50. This is an important short-term resistance.The blue trend line is also an important support, so a break below 98.20 will open the way for a move towards 97.

The weekly candle in the US dollar index has transformed into a bullish one despite the heavy selling against the dollar early on Monday. A close above 99 for the week will imply that new highs are coming. Non-Farm Payrolls on Friday will play an important role in what the greenback will do next.