The Dollar index made an impressive bullish reversal yesterday after Janet Yellen's speech regarding FED monetary policy. The Dollar index managed to test the important support at 87.50 area and bounce strongly above short-term resistance levels to reach back above 89.
Red line = resistance
The Dollar index not only broke above the red trend line resistance but also managed to break above the Ichimoku cloud. The decline is now labeled as a corrective action relative to the bigger and longer-term uptrend. Now we are starting a new upward move that, I believe, will finally reach at least 91 which is the bullish flag target that we have been talking about for so long. The Dollar index could see a short-term pullback towards 88.80-88.60 but it will be a buy opportunity, I suppose.
Blue line = weekly support
The weekly chart has been turned to bullish after yesterday FOMC. The weekly support at 87.75-87.50 was tested successfully yesterday; and the index made an impressive bounce back above 89. The bullish flag target remains at 91 and, I guess, more dollar strength should be expected at least until the end of the year.
The material has been provided by InstaForex Company - www.instaforex.com
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