FX.co ★ Technical analysis of USDX for May 23, 2016

The Dollar index remains supported but there are more signs of a possible bearish short-term reversal ahead. So Dollar bulls should be very cautious if not willing to take profits at current levels.

Blue lines - bullish channel

The Dollar index is testing the lower boundary of the bullish channel. The stochastic has already given a sell signal in the 4 hour chart after turning below 80 from overbought levels. Price is expected to pull back at least towards the Kumo (cloud) support.

The Dollar index has given a reversal signal 3 weeks ago after bouncing off the 38% Fibonacci retracement. Stochastic oscillator has turned upwards above 20 from oversold levels. This was an important buy signal. A short-term pull back is overdue to bulls need to be cautious. I prefer taking profits from longs at current levels.