FXstreet.com (Jakarta) - The dollar index fell and broke the short-term diagonal support on increased risk appetite and rumors China will diversify its foreign-exchange holdings. The greenback, having been pressured by improved risk sentiment, does not seem to get any leverage from improving global recovery prospects despite that the US is likely to recover before Europe and Japan.

A large head-and-shoulder formation is developing and today's penetration of the short-term diagonal support increases the risk of further declines. The dollar index is at the 84.50-area support. If this is broken, the index may fall to the 83-area support, said Hans Nilsson, analyst at CMS Forex.

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