The Dollar index made new highs yesterday and continues to rise. Price remains in a bullish trend in all time frames. Overbought conditions and divergence signs are still there providing a warning. 100 price level is important junction for a short-term trend reversal.
Black lines - bullish channel
The Dollar index continues to trade above the Ichimoku cloud and inside the bullish channel. Short-term support is at 100 where the cloud support is found. Price is very close to the upper channel boundary. At current price levels I would not only look to protect longs but also look to short this index. A pullback is warranted and justified.
Blue line - previous highs
Red lines - trading range
Green line - important support trend line
The Dollar index is breaking to new multi-year highs with an impressive breakout and very strong bullish trend. On a weekly basis there are important bearish divergence signals in the stochastic oscillator. A pull back towards 98 could be justified. However the bullish trend will be in danger if prices break below the green trend line support.
