FX.co ★ Technical analysis of USDX for September 2, 2016

The Dollar index has made a pullback from overbought levels yesterday as expected. US NFP data is due today, that will be a big market mover. The best strategy is to wait and resume trading after the announcement.

Blue line -support

Price is between support and resistance trend lines and above the Ichimoku cloud on the 4 hour chart. 94.20-94.50 is a critical support level. Resistance is at 96.50. A break of either of these two levels will provide a nice new trend.

The long upper tail in the weekly candle is not a good sign. A weekly close below 95.50 will be a bearish sign for the Dollar index and a reversal signal as well. Price reached close to the Ichimoku cloud were sellers appeared and pushed the index lower. Today's close will be very important for the future trend of the index. A close above 96 could imply more upside for next week. A close below 95.50 could signal that another test of the green trend line is coming.