FX.co ★ Technical analysis of USDX for December 7, 2016

The US dollar index canceled the bearish flag formation and bounced towards the breakdown area of 100.60-100.70 for a back test. There we also find the first important short-term resistance of the 38% Fibonacci retracement.

The US dollar index is testing the 38% Fibonacci retracement resistance level. The price is below the Ichimoku cloud on the 4-hour chart. The price is back testing the broken blue trend line that was once support. The short-term support is at 100.

The US dollar index has reached the 61.8% Fibonacci retracement of the entire decline from 2001. The price shows initial rejection signs, but it is still too early in the month and we have two important central bank meetings ahead. Both the Fed and the ECB policies and announcements will directly affect the trend here: it will either reverse the bearish monthly picture or reinforce the downward momentum from the start of the month.