The Dollar index spiked higher on Friday breaking above 80.30-40 short-term resistance and moving higher towards our target of 80.70. The Dollar index managed to reach 80.60 but the strong resistance in that area has made it pull back and back test the broken resistance at 80.30-40.
Short-term trend remains up. Price is above the Ichimoku cloud and makes higher highs and higher lows. The short-term chart as shown above confirms that short-term trend is up. Short-term support is found at 80.30 and short-term resistance is at 80.60.
The Daily chart above shows why it is difficult for the Dollar index to break above 80.70 as this is where the Ichimoku cloud resistance is. I expect a back test of the trend line near 80.20-30 and if this trend line support holds, then we should expect another move upwards to break above the Ichimoku cloud and confirm our new target of 81.30. Important support for the longer-term bullish view we have in the Dollar index, is the 79.70 level. A break below this level will be catastrophic for our bullish scenario.
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