Price has been swirling around 90.00 since mid-January of this year. Recently, the DX has found support at the bottom of the smallest channel (green), which begins in March 2008. The momentum indicator has made a lower swing low, so it remains in downtrend on this timeframe and is still below the zero level, but has recently hooked upward.
The following weekly chart of the DX shows that price has popped back above 90.00, after making a lower price swing low. However, the momentum indicator made a diverging higher swing low and has popped back above the zero level.
So, is price finally stabilizing at 90.00? Watch for the MOM to make a new swing high on this timeframe on any further rally to support further strength in the DX in the weeks ahead, as well as for the MOM to break and hold above zero on the monthly timeframe.
Otherwise, failure to do so may see price drop to new lows this year. I had mentioned a long-term Fibonacci retracement level of 84.55 in my post of February 10, which is still in effect as major Fib support.
