FX.co ★ USDX technical analysis for March 10, 2016

The US dollar index has reversed off the 50% retracement, but the price is still below important trend-change resistance. The level of 98.50 presents a critical resistance, and if bulls manage to break above it, then the bullish trend will strengthen and the index will move towards 100.

With EUR/USD as the major component of the US dollar index, the price is expected to trade with high volatility today, as the ECB announces the strategy regarding the QE program. If EUR/USD gets pressured below 1.08, then we could be fairly certain that a new uptrend in the US dollar index has started with targets above 100-101. Short-term resistance is seen at 98.50. Support is at 96.60.

Blue line - trading range

Red line -trend line support

In the weekly chart above, we can see how the index has been trading sideways for several months now. The red line is important support. The sideways consolidation is likely to break to the upside, but bulls should use the trend-line support as stop.