The Dollar index made an impressive upward reversal on Friday; and now it is back testing this breakout. The price has broken the short-term resistance area and has given a buy signal that could target 100 over the coming weeks as long as we hold above the last weeks lows.
Green line = resistance
The Dollar index, as shown on the 4-hour chart, has given a buy signal on Friday by breaking above the Ichimoku cloud and above the green trend line resistance. The downward move from 95.50 is overlapping and thus corrective. The reversal that stopped the sequence of lower lows and lower highs implies that trend is changing to neutral and if we see higher highs and higher lows we will confirm bullish trend change.
The weekly chart remains fully bullish as the price continues to trade above the important support by the tenkan-sen (purple line) at 91.55 and the long-tailed weekly candle suggest increased buying interest. I expect the Dollar index to continue higher towards 100 over the coming weeks. Important support is the last weeks lows. Breaking below will increase selling pressures towards 91.50.
The material has been provided by InstaForex Company - www.instaforex.com
