FX.co ★ #USDX analysis for January 20, 2014

The Dollar index has made an impulsive rise from 80.40 lows. Prices have managed to make a new short-term higher high at 81.30. This is a good sign for bulls, but we need more. Prices are still below the important high of 81.50 and still inside the important resistance area. Short-term support is found at 80.40 and as long as prices trade above that level, bulls will feel more confident.

Short-term support is found at 80.80. A pull back towards that level today could be justified. Breaking below that level will put the 80.40 low in danger. Prices could make a pull back towards 80.80 and then resume their upward move that started at 80.40. The next leg up should be strong enough to make new intermediate highs above 81.50.

On the daily chart, prices look supported and challenging the important resistance levels at 81.10-50. A clear break out above this area will open the road to reach 83-84 over the comming weeks. We remain bullish as long as prices trade above 80.40. Prices are starting to build a bullish price pattern with higher highs and higher lows and combined with a break above 81.50 will confirm our bullish view and expectations.