The US Dollar Index continues its rally higher as expected after the reversal on May 19. The US Dollar Index gave a buy/reversal signal when it broke above the downward sloping wedge. I have been calling for this reversal as the index approached very close to the support of the 38% Fibonacci retracement on a weekly basis.
The US Dollar Index is approaching the 61.8% retracement of a decline from 100. Strong resistance is found at this Fibonacci retracement and I will not be surprised to see a pause of the rise. Important support is at 94.80. The Ichimoku cloud remains below the current price confirming that trend is bullish.
Red line = resistance
The US Dollar Index has also reached the Ichimoku cloud resistance on the daily chart. The red line resistance was broken and the price is testing the lower cloud boundary now. If bulls manage to push the price into the cloud, this will be an important step into changing the Ichimoku trend to neutral on the daily chart. My view remains bullish in the longer term.
The material has been provided by InstaForex Company – www.instaforex.com