The Dollar index remains in a strong up trend and has broken as expected towards new highs. The bullish flag pattern that I noted a couple weeks ago is progressing according to the plan and should bring the index towards 91. Dollar strength is evident and pull backs should be treated as buy opportunities.

The Dollar index remains in a strong up trend in the short-term chart as shown above. Price is above the Ichimoku cloud and all cloud indicators remain bullish. Short-term support is found at 86.75 and at 86.25. A pull back towards 86.75 should not be ruled out as this was the previous high. So after making a new higher high, we could see a back test of the break out area.

Orange line = previous high broken

The Dollar index remains fully bullish in the daily chart as well. The bullish flag is unfolding and I expect the longer-term trend to remain strong and push the index towards our target of 91. A back test of the break out area and the previous high at 86.75 is possible and should be bought. Stop for longs should be the 85 level in case the new high was a fake break out. I give little or no chances for this scenario but in every case we should protect our positions.