FX.co ★ Technical analysis of USDX for August 31, 2016

The Dollar index continues rising higher and making higher highs and higher lows. The index is approaching the important weekly resistance, and soon we will see either an important breakout or a rejection. Dollar bulls should raise their stops to protect their positions.

The black line - resistance

The blue line - support

The Dollar index is making higher highs and higher lows above the 4 hour Ichimoku cloud. Oscillators are diverging, and the time for a pullback is getting closer. The pullback target is the Ichimoku cloud. Short-term support lies at 95.80 and the next level is at 95.

The weekly candle has broken above the tenkan-sen indicator (the red line) and is heading towards the weekly cloud at 95.55. A rejection at that level will push the index back towards the green trend line support near 95. This is not the time to be buying but to protect longs. A breakout above the weekly cloud will be an important long-term bullish signal.