Forex Technical Update

Previous: US Dollar Index Trading Down Toward Key Support Near 77.50 (2/28)

USD Index

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The US Dollar Index is maintaining a bullish stance in the daily chart, staying above 78.00. The RSI failed to tag 30, showing lack of bearish momentum, though the bullish momentum was not very strong neither. However, market action shows higher significant highs and lows. Thus the current bullish breakout from a counter-trend trendline is seen as a sign of bullish continuation.

The daily RSI will have to break above 60 to show some bullish bias, and tag 70 to confirm the bullish continuation momentum. The 82.04 high is a viable first target for the bullish scenario. 83.50 is the next resistance pivot established during August and September of 2010.

The 4H chart shows that the breakout is in a 5-wave rally. Could this be the end of an impulse wave to be followed by a throwback? A throwback to 79.00 with inability to break below 78.80 would show a good sign of bullish intent.

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Fan Yang CMT is a trader, analyst, educator and the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.   

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