Dollar Ends Run And Reverses From 95

By Alexandros Yfantis of Trading2Day

Alexandros Yfantis • May 31, 2018 at 5:15 AM EDT

The Dollar index has most probably topped yesterday as the reversal underway is shaping a very bearish weekly candle.

The Dollar index has most probably topped yesterday as the reversal underway is shaping a very bearish weekly candle. Combined with the bearish divergence RSI signals, the rejection by the Ichimoku cloud at 95, I believe we should at least see a move lower towards 92.

(Click on image to enlarge)

(Click on image to enlarge)

The Dollar index has topped at the same time the media and the traders sentiment were fearful of a new European crisis due to political tensions in Italy. Trending topics in social media with keywords like Quitely or Italexit were an indication for me that too many bears (for EURUSD the major component of the index) are out there and that most longs got wiped out.

The major component of the Dollar index has bounced off very important support area. Price holds above the 38% Fibonacci retracement and the weekly EURUSD candle is shaping up to be a very bullish reversal hammer with a very long tail.

(Click on image to enlarge)

I do not know if we are going to form a right shoulder now, all I know that I remain bullish EURUSD and bearish the Dollar for the next couple of weeks.

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