01.09.201411:22 Forex Analysis & Reviews: #USDX Technical analysis for September 1, 2014

The Dollar index tested our critical support at 82.40 on Friday and made a strong reversal above the 82.54 resistance level. The new high at 82.80 shows that Dollar remains in a strong up trend that could reach 83. Last week, I was bearish about the Dollar index as long as price was below 82.54. Breaking above that level canceled my bearish scenario and pushed the index to new highs.

The Dollar index has broken above the Ichimoku cloud once again in the 4 hour chart. The short-term trend remains bullish. The index is making higher highs and higher lows. Support is found at 82.60 and resistance at 83. A new high above 82.80 is expected before a deeper pull back. As long as price is above 82.40, the trend will remain bullish and short positions should be avoided.

The daily chart shows how price remains inside the upward sloping channel. The ichimoku cloud is well below the current price level. The trend will change if the Dollar index breaks below 82.40. Until then, bulls remain in control. If that level is broken, we should expect a move towards 81.85.