FX.co ★ Ichimoku indicator analysis of USDX for September 21, 2017

The Dollar index spiked yesterday after the FOMC. Price is testing weekly resistance levels at 92.50. So far we consider this upward bounce as a corrective play in a larger down trend.

The Dollar index has broken out of the Ichimoku cloud in the 4-hour chart. This is a bullish sign. The Dollar index is however diverging. So a pullback towards cloud support at 92.10-92 is justified. Bulls will then need to hold above support. Otherwise we will see this breakout as a fake one.

On a weekly basis, the Dollar index is testing the weekly tenkan-sen resistance (red line indicator). Price remains in bearish trend. The rest of this week and the next will be very important for the medium-term move which the index will make. A rejection here will open the way for new lows below 90. Continuation of Dollar strength will open the way for a bigger bounce towards 96.