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26.01.2016 09:54 AM
USDX technical analysis for January 26, 2016

The US dollar index is getting under pressure ahead of the FOMC rate announcement and Janet Yellen's speech. The bearish wedge pattern I mentioned in my previous post is being tested and we could see a downward breakdown over the next couple of sessions.

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Red lines - bearish wedge

The price is above the Ichimoku cloud in the 4-hour chart, but it has also broken below the kijun-sen support. The next support is found at 98.80-98.60 where the Ichimoku cloud is observed and a lower boundary of the upward sloping wedge.

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Red lines - upward sloping wedge

The daily chart remains bullish as the price remains above the cloud, inside the wedge and above both the tenkan- and kijun-sen indicators. Volatility is expected to rise over the next two sessions. I believe the price is likely to break out downwards towards 97. Resistance is seen at 100.

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