The Dollar index is at an important junction regarding its bullish trend. The Dollar index is pulling back after the break out above 88.15 and is back below 88. If this pull back does not reverse upwards soon, then bulls are in danger of seeing another fake break out and a reversal towards 87 or even 86.
Black line=sideways channel
The Dollar index has pulled back towards the Ichimoku cloud inside the sideways price channel. Support is at 87.60 and resistance at 88.35. Breaking above 88.35 will signal that Dollar bulls are back and the trend continues to be bullish. If support at 87.15 fails we should expect a deeper correction towards at least 86.
The weekly candle in the Dollar index chart above is not shaping up to be good for the bullish trend. If until the end of the week we see an upward reversal and a close near the highs of this week or higher then we should be confident that the bullish trend remains strong and our bullish flag targets of 91 remain intact. If however this week ends below 88 this will not be a good sign but not the end of the world for bulls.
