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

The Dollar index is weakening and testing short-term support at 100.70. With NFP numbers announced today traders should be very cautious as if the economy beats the market expectations we could have the much anticipated third drive higher towards 102.50 to complete the upward cycle.

The Dollar index has support at 100.70-100.80. Price is under pressure as we break below the 4-hour cloud support. This is an important support area. So a clear break below 100.70 could signal that the top is in for the Dollar index. Otherwise, if support is held we should expect new highs to be seen near 102.50.

With oscillators overbought and the weekly candle showing reversal signs, Dollar bulls need to be very cautious. However, the weekly candle could change to bullish after the NFP announcement later today. Volatility is expected to rise today and traders should be patient.