FX.co ★ Technical analysis of USDX for December 5, 2016

The Dollar index opened very strongly today as its main component, the EUR/USD pair, was under selling pressures after the Italian referendum. However Dollar strength has weakened substantially gradually and most of the gains are lost at the European open.

The Dollar index has bounced off the important 100.65-100.70 support level which it held on Friday. Oscillators are overbought and turning lower. The long-tailed candle being formed on the daily chart is a bearish sign. Trend change confirmation will come once price breaks below 100.65. Resistance remains at 101.50.

Last week's weekly candle is a bearish reversal candle. However, traders need to be patient as this week's candle is promising a lot of volatility this week. A weekly close below 100.60 will be a bearish sign that should push the index towards the long-term important support green trend line. As long as the Dollar index is above the weekly cloud and the green trend line bulls remain in control.