The US dollar index reached a new higher high today as we expect some critical news for the dollar to come after the surprising Fed meeting that will take place today. Rates are forecasted to be raised earlier than expected. Why else would the Fed hold a surprise meeting?

Blue line -support

The US dollar index is trading above support at 98.75 and above the Ichimoku cloud. A trend is bullish. The price is moving towards higher highs and higher lows. But we also have a bearish divergence in stochastics. The price is not approaching a higher high as the index price is doing. This should raise our alert and bulls should raise their stops to protect their positions.

On a weekly basis, we are approaching important resistance levels that are expected to be broken after the Fed announcement of the rate hikes. Stochastic is overbought for that last four weeks and this produces a warning for bullish positions, but still we have no reversal signal. Just warning that bulls need to be very cautious. Betting against this market trend is also not preferred as the bullish trend is strong.