The Dollar index after being rejected by the strong resistance at 80.60-70 has pulled back as expected by our analysis we posted yesterday. The pullback could be a back test of the breakout and could have reached the Ichimoku cloud support as we mentioned yesterday.

And this is what exactly happened. The Dollar index has pulled back towards the Ichimoku cloud support above the 80 price level. The Dollar index is currently trading above support. If the Dollar index moves below 80, then bulls will be in danger. Breaking below 79.70 will confirm that it is going lower towards 79.20 with increased chances of making new lows.

The daily chart shows clearly how the index got rejected by the daily Ichimoku cloud resistance. Now it is testing once again the upward sloping blue trend line support. I believe that there is high probability that support will hold and the index will reverse upwards towards 80.50 again. A break above 80.60 will push the index towards 81. A break below 79.70 will push the index towards 79.20.