Once our support trend line at 80.15 was broken, we noted that the downward move was looking impulsive and a new low was expected. The trend remains down with support at 79.60 and resistance at 80.35. Prices are expected to bounce towards the 50% or 61,8% retracement. A signal that could confirm this upward bounce is under way will be if prices break above the recent high at 79.77.

The chart above shows the levels that the upward bounce could reach. The decline is impulsive and for trend to remain down prices should move above the 61,8% retracement. More dollar weakness is expected after the upward bounce completes.

The daily chart continues to show that longer-term trend is downward and despite the small try for an upward bounce, prices collapsed and lost the entire rise in just one day. This confirms the strong downtrend that the Dollar Index is in. We remain bearish in the longer term. In the short term we expect a small upward bounce, and then downward pressures to resume to new lows.