The Dollar index remains in downtrend. The index continues to make lower lows and lower highs. Short-term support remains at 79.15-20. Short-term resistance is found at 79.50-60. Breaking short-term resistance could push the index towards the next resistance at 79.90. Breaking support could push the index towards 79 which was our bearish flag target from 80.20 for some time now if you follow our posts.

The Ichimoku cloud confirms that short-term trend is down. The contracting downward sloping channel is also confirming downtrend. However we witness a decrease in volatility and a decrease in the price swings. It may be time that a short-term bottom is being formed. However it is too early to say anything as we have no buy signals even in the short-term.

Our longer term view remains the same. Trend is down and the index continues to make lower lows and lower highs. However we should note that 79 is an important support level. We are now trading at 79.40 and if you feel a reversal is coming, being long with 79 as stop is a good strategy. If a trader want to play it more safe, can wait and enter a long position if resistance at 79.60 breaks with 79.20 stop. If a bounce is to be made, 80 is the first target and then 80.50. The longer-term trend will change if 81.30 is broken upwards.