FX.co ★ USDX technical analysis for February 29, 2016

The Dollar index has finally reached the 61.8% Fibonacci retracement resistance and is pulling back. The short-term trend remains bullish but we might see a pause for a couple of days before price resumes the bullish trend.

Blue lines -bullish channel

Price remains inside the upward sloping channel and above the Kumo (cloud). Price is also above the kijun- and tenkan-sen indicators confirming that trend remains in short-term bullish trend. However, the reversal at the 61.8% Fibonacci retracement resistance is the first bearish sign. Bulls need to be very cautious as there are increased chances we break the bullish cloud and touch cloud support at 97.10.

The weekly close above the tenkan-sen last week was a bullish sign. We can see a back test of the tenkan-sen support (red line indicator) and then resume the up trend. If the back test does not break below the tenkan-sen and the kijun-sen (yellow line indicator) then we could expect the resumption of the up trend towards next resistance of 98.50. Overall bulls should remain under control as long as price is above the weekly cloud (at 96). Bulls want a break above 99.80 in order to confirm the start of a new up trend starting with new highs as targets.