The US dollar index is heading strongly upwards at a new seven-week high of 97.45 after the jump above the 50-day simple moving average (SMAs), posting remarkable gains. However, the stochastic oscillator seems to be overbought as it is trying to turn lower, while the RSI is flattening in the positive territory but remains above the uptrend line.
Should the price stretch north the two-year high of 98.25 could come into focus. If the buying interest extends, attention could then turn to the 98.70 resistance barrier, taken from the minor low in March 2017.
Alternatively, in case of a failed attempt to gain more ground, the price could return to the 97.20 support level. If traders continue to sell the index, the price could decline until the 50- and then at the 200-SMAs currently at 96.88 and 96.54 respectively before touching 96.27. More losses could send the index towards the 23.6% Fibonacci retracement level of the upward movement from 88.10 to 98.25 near 95.84.
In the long-term, the market retains the bullish structure as it has been trading within an ascending sloping channel since June 2016.
