FX.co ★ Technical analysis of USDX for February 2, 2017

The dollar index remains in a bearish trend. The price made a lower low yesterday that was not confirmed by the RSI. We see warning divergence signs that a strong bounce could start anytime soon. Important level for a confirmed reversal is at 100.50.

Blue lines - expected path ahead

Black line - bullish divergence sign

The dollar index continues to make lower lows and continues to trade inside the wedge and below the cloud resistance. Short-term support is at 99 and resistance at 100.50. I'm currently neutral expecting a strong reversal in the dollar index.

Red line - bearish divergence

The dollar index continues moving towards our weekly target of 99 after breaking below the weekly tenkan-sen (red line indicator). Trend remains bearish in the short term but on the longer term the price could be forming wave 4 and a wave 5 up towards the level of 105.