The US dollar index failed to reach a new lower low last week. It is now testing important short-term resistance levels. As I have been expecting since last Friday, bulls should regain control of the trend as the Fed is expected to raise rates and strengthen the US dollar.

Black line - resistance trend line

Although the market might have already priced in a rate hike, technically the US dollar index is ready to give a short-term bullish signal by breaking above the resistance trend line at 97.90. Next resistance is seen at 98.90. Support is found at 97.20. If it gets broken, we should expect the level of 96.50 to be tested.

In the weekly chart, we can see how the price held above the first Ichimoku support the tenkan-sen at 97.15 where the 50% Fibonacci retracement is also found. Bulls have stepped in and from this area we could see the next upward leg that can bring the index to new highs above 100-101.