US Dollar index chart analysis

This is the weekly chart of the US Dollar index which represents the US dollar versus a basket of 6 currencies: the Euro, the Swiss Franc,the Japanese Yen, the Canadian Dollar, the British Pound and the Swedish Krone.

1) The USD index has been in bearish trend since the end of March 2009.
2) The support of 78.0 was broken last week and now acts as a resistance.
3) The next support lies around 72.0.



Now let's examine the daily chart of the USD index:

1) the downtrend is clear. Don't look for another trendline than the one on the chart: the only correct one is the line that connects the highest high with the highest high preceding the lowest low.
2) in my system, no buy signal is triggered yet as the 20 day moving average (blue line) is not yet crossing the 50 day moving average (green line) to the upside.
3) however if we take into account the MACD indicator, we can see a bullish divergence between the USD index and the MACD lines: the USD index is going down whereas the MACD lines are going up. Hence a potential scenario is a bullish reversal (see green arrow) of the US dollar index in the coming days if price can cross the trendline to the upside.