FX.co ★ USDX technical analysis for January 7, 2016

The US dollar index has reversed as expected, although it still has the potential to make one more new higher high closer to 100 before reversing. With Non-Farm Payrolls on Friday, guessing where the dollar is heading is very difficult. The best thing to do is to wait and trade after the Friday announcement.

Blue line - trend-line support

The US dollar index has almost reached the 78.6% Fibonacci retracement and reversed. However, the price remains above the 4-hour cloud support and above the blue trend line. As long as we are above the 98 level, we could expect a move higher towards 100.

On the daily chart, the US dollar index is fully supported by the Ichimoku cloud and trades above both the tenkan-sen and kijun-sen indicators. The price is making higher highs and higher lows. A daily close below 98.80 will be the first sign of a bearish reversal. If this happens, then we should find support at 97.