The Dollar index made a new higher high on Friday above 80.35. Now it is pulling back as price was at overbought levels. I expect a pull back to reach the Ichimoku cloud support as shown in the chart below.
First support is found at 80.05. Next support is at 79.90 and then if this is broken I believe the support at 79.60 should hold. On the other hand, resistance is found at 80.50 and 80.70. Clearing above 80.70 will increase the chances of reaching 81. Breaking below 79.60 could push the index to previous lows just below 79.
The daily chart shows how price has broken above the daily Ichimoku cloud resistance and has hit the blue upward sloping trend line that was once support, but now is resistance. A pull back towards 80.20-.10 is justified but eventually bulls will need to show strength and break above 80.70. Trend is bullish and I prefer long positions targeting at least 81 as long as price is above 79.60.
The material has been provided by InstaForex Company - www.instaforex.com
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