FX.co ★ #USDX Technical analysis for November 6, 2014

The Dollar index made another new higher high yesterday and remains in the up trend. The bullish flag is working as expected and my longer-term target of 91 remains possible. The short-term trend however is looking a bit tired and we could see a pullback before moving upwards again.

The Dollar index is testing the tenkan-sen support at 87.25. A 4-hour close below that level will push the index towards 87. Next support if 87 is broken is the 86.50 level where the Ichimoku cloud is found. Currently, the short-term trend is bullish, supported but fragile. Bulls need to be very cautious as we could start a deeper pull back towards 86.

On a weekly basis the Dollar index remains fully bullish in ichimoku cloud terms. Strong support is at 85.60 and I believe if we are supposed to make a deep pull back, then this is the level we are going to see. The longer-term trend remains bullish and the bullish flag has target of 91. I continue to believe we can achieve that level and even better.