Dollar Index reaches key resistance which will be decisive
The US dollar has been on the rise over the past two trading days, bringing the price back to the 200-period (four hour) SMA which has provided key resistance one two occasions in the past month. The consolidation we have seen overnight looks a lot like a flag, which is a continuation pattern and points to another move higher. However, the existence of that SMA means I am awaiting a break higher to gain confidence that the next move is to the upside.
An intraday close above $96.15 would point towards a move to $97.0, whereas a reversal pattern could point to yet another selloff, initially back towards $95.0. The stochastic and MACD indicators both show a market which could possibly turn lower and thus awaiting the initial move is going to be key here.