As said in the last post about the dollar index, the index rose till 83.36 but has met resistance there. The 83 to 84 zone is a confluence of resistances containing the 38% retracement, 50 DMA and 100 DMA. The index needs to close above 84 for further momentum, however in the past few days there is a negative divergence developing on the MACD indicators which coupled with strong resistance ahead means that the index can retest its support area of 82 to 81.88. If this support area is breached then the index can retest the lows of 80.
Key levels to be watch are 83.36 to 84 on the up side, and 82 to 81.88 on the down side. Traders also need to watch the support at 80 incase the index breaks below 81.88.
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