FX.co ★ USDX technical analysis for February 16, 2016

The US dollar index continued its upward move after breaking out of the downward sloping channel. However, rising momentum makes me question if the US dollar is ready for a big bounce now or we should see new short-term lows first.

Blue lines - bearish channel

The US dollar index has reached the Ichimoku cloud resistance in the 4-hour chart as we can see above hindering the rise. The price is still above the tenkan- and kijun-sen indicators, so this will be an important factor to watch for if the uptrend continues. Support at 96.40 and at 96 should hold if we want to hit higher levels. If this support is broken, we should expect prices to fall to new short-term lows at 95-94.

As expected, the weekly chart is bouncing towards the previously broken support levels of the kijun-sen and the upper cloud boundary. A rejection here will open the way to a deeper correction towards 92. US dollar bulls must be very cautious.