The Dollar index as mentioned yesterday has paused its upward move and is making a sideways correction. Yesterday the Dollar index pulled back lower to back test the broken wedge that was once resistance. It touched the upper wedge boundaries and bounced upwards. The Dollar index reached the 50% Fibonacci retracement at 79.80 is now higher. Bulls will need to hold that low and move higher. Short-term resistance is the high inside the 80.30-35 area.

Short-term support is found at 79.80 and 79.65. The Ichimoku cloud continues to provide support as it is below the current price. We mentioned in a previous post that any pull back should be bought as this upward reversal in the Dollar index can unfold into a bigger reversal towards 81 and higher. Stop for bulls is the same low at 79.20.

In the weekly chart above we see how the Dollar index is trying to move back above the long-term trend line that was broken a couple weeks ago. We are approaching critical levels as there is increased resistance in the area of 80.40-70. A break above this area will help Dollar bulls make a move higher towards the Ichimoku cloud at 81.35-90 area. We are bullish as long as the index is above 79.20