The Dollar index is in a short-term up trend and as can be seen in the chart below a bullish flag is being formed. The sharp rise from mid 79.00 to 80.40 has now been paused and price is moving sideways creating a bullish flag. The trend has reversed to up, and we expect another move higher for the Dollar index.
The Dollar index remains above the Ichimoku cloud and the broken red trend line. If prices pull back towards the 38% or 50% retracement this index is a buy with 79.20 stop. Our view is bullish and I believe trend has changed to up, and there is increased probability to see this index towards 81 soon.
The daily chart also confirms our view of the bullish flag. Strong resistance is found at 80.50 and 80.80. Breaking above these resistance levels will push the index higher to challenge 81.40-50 highs. We prefer long positions above 79.20.
