The Dollar index is consolidating around the important level of 85.50. At the same time it holds above the 85 support. There are many signs that indicate impeding dollar strength and that the upward trend will resume shortly.
Red line = price channel
Blue line = pivot level
The Dollar index remains inside the long-term upward sloping price channel. Although the Dollar index is below the Ichimoku cloud in the 4 hour chart, we have seen a double bottom at the 85 area. Price is mostly consolidating sideways and the correction is unfolding over time and not over the price.
In the daily chart, the Dollar index remains above the 23% retracement. Bulls need to break above the tenkan-sen at 85.85 to regain momentum. So breaking above that level will be a buy signal that could push the index towards its highs and maybe to new highs near 87.17 which is our first target. Trend remains bullish according to the ichimoku cloud indicators. If we see a daily close below 85 we should expect more dollar weakness that will push the index towards 84.
The material has been provided by InstaForex Company - www.instaforex.com
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