The Dollar index made a new higher high yesterday as expected. Trend remains bullish and as I have mentioned in previous posts, the best strategy is to follow this trend and not bet against it. The pull backs are shallow and the tremendous strength of the Dollar is crushing everyone against it. The break out above 85 as we mentioned a few days ago was very important.
The Dollar index remains in fully bullish mode according to our Ichimoku cloud indicator. Support at 85.50 was held and price is now back above our short-term target of 86. Trend remains bullish as price continues to make higher highs and higher lows. We prefer to continue to follow this trend and raise our stops rather than take profits or bet against this trend. Looking for a top and shorting this index is very dangerous as the trend is very strong.
Red line = resistance
Blue line = support
The monthly chart above shows the important break out that occured in the Dollar index. Not only was the triangle broken but the index has also made a new higher high from 2011. This strong break out was several times noted in our past analysis. Even our modest bullish targets of 85-86 were achieved and the strength of the index remains remarkable. Yes the rise is parabolic and the pull back could be very sharp and painfull for bulls, that is why we prefer to raise our stops to 85.47 and remain long.
The material has been provided by InstaForex Company - www.instaforex.com
