The Dollar index made another new higher high yesterday and remains in the up trend. The bullish flag is working as expected and my longer-term target of 91 remains possible. The short-term trend however is looking a bit tired and we could see a pullback before moving upwards again.
The Dollar index is testing the tenkan-sen support at 87.25. A 4-hour close below that level will push the index towards 87. Next support if 87 is broken is the 86.50 level where the Ichimoku cloud is found. Currently, the short-term trend is bullish, supported but fragile. Bulls need to be very cautious as we could start a deeper pull back towards 86.
On a weekly basis the Dollar index remains fully bullish in ichimoku cloud terms. Strong support is at 85.60 and I believe if we are supposed to make a deep pull back, then this is the level we are going to see. The longer-term trend remains bullish and the bullish flag has target of 91. I continue to believe we can achieve that level and even better.
