Dollar Index could sell off from trendline resistance
The Dollar Index has been exhibiting clear lower highs over the past week, and today seems to be continuing that trend with a bearish engulfing candlestick formation following a third touch of this trendline.
Currently, we are seeing the 20-period SMA (four-hour) providing support, which has been relatively reliable in the past. However, should we see the price move below $97.50 then it would be the indicator I would need to expect a move lower towards the $96.70 area. However, a move above the descending trendline resistance, (currently $97.9) would point towards a possible move up to $98.05 which is the level that needs to be taken out for a bullish continuation outlook.
For now, I am bearish given the trendline resistance, coupled with lower highs and the bearish engulfing formation. This would be a more confident view once the price moves below $97.50 or else a move above $98.05. Bear in mind that the outlook for the Dollar Index is key for direction in dollar crosses across the board.