FX.co ★ Technical analysis of USDX for November 1, 2016

The Dollar index bounced yesterday towards 98.70 where short-term resistance was found. Price got rejected and reversed back towards the lows of last week. This weakness at the current price levels is a very bearish sign as I have warned several times of the bearish divergence signals.

The Dollar index has bounced towards the 61.8% Fibonacci retracement of the latest decline and got rejected. Price has reversed and is making new lower lows.

At the same time, we have a break below the Ichimoku cloud on the 4-hour chart confirming a short-term trend change to bearish.

Red lines - trading range

Green line - support

On a weekly basis, the reversal I mentioned yesterday is getting some follow today as Monday was a backtest day. The weekly candle of this week has not started very well for bulls as the bounce yesterday does not seem strong enough. A pullback at least towards 96.50 is expected. This will be a crucial test for the longer-term trend of the Dollar index.