FX.co ★ #USDX Technical analysis for November 7, 2014

The Dollar index gave a new higher high yesteray and I believe bulls should be very cautious and raise their stops to protect long positions. Although my bullish flag pattern gives 91 as target, I think the current upward move is overextended and we should expect a pullback towards at least 87 in the short-term.

The Dollar index has support at 87.65 and at 87.05. I believe that if the first support is broken, we should expect a pullback towards the 38% retracement. Long-term trend remains bullish with 91 as target as I have noted several times before due to the bullish flag pattern I showed.

In the very short-term view, the Dollar index shows signs of fatigue and 87.85-87.65 cloud support will be tested. If this support area is broken, we will see a deeper pull back towards 87. Breaking above 88.05 will be a bullish sign that could produce a new upward move towards 88.50 to give a new high. Concluding, longer-term remains bullish with 91 as target, but bulls should be very cautious as this could turn any time.