The Dollar index has made a sharp turn upwards breaking shor-term resistance at 80.40. This was our buy signal and a cancelation of the bearish flag pattern. Combined with the fact that the Dollar index has bounced upwards again from the important 80 level, makes us confident that this upward move has potential to reach near 81.

Now that the index has broken above the previous high and the 38% Fibonacci retracement, there is increased chance of seeing the index near 80.75 to 81. The next short-term resistance is found at 80.65 and then at 80.80. Short-term support is found at 80.35 and then at 80.15-10.

The daily chart is getting closer to our target once 80.40 was broken. The pattern in the Dollar index is bullish as we see higher highs and higher lows. Important resistance is found in the area included inside the blue rectangle. Breaking above the blue rectangle resistance area will increase chances of testing the highs near 81.30-40. We are bullish the Dollar index with 80.15-80 stop.