The US dollar index spiked higher yesterday after the comments of European Central Bank president Mario Draghi and the plans to extend QE in the eurozone in December. Besides, the possibility of a rate cut by the ECB pushed the US dollar index higher.

The US dollar index broke above the 4-hour Ichimoku cloud resistance and the downward sloping red trend line. The index has reached the previous highs at 96.50 and has paused its rise. Bulls need to be cautious as we could see a pullback towards the Ichimoku cloud in order to back-test the breakout.

Green line - weekly support

The US dollar index has managed to break above the weekly Ichimoku cloud and is now testing the long-term red trend line. A rejection at current levels could bring the index back towards 93. The bullish flag remains intact and we still have no breakout.