The US dollar index produced a new ten-week high of 98.67. The buyers clearly overwhelmed the sellers from the last swing, pushing up from the 96.30 level after the price tested the middle Bollinger band multiple times in a sideways move during July. It is worth mentioning that once after the price bounced off the mid band and rallied up, of the last nine days only two red neutral candles formed, confirming a volatile move north.
Momentum indicators are currently in the positive zone, agreeing with the bulls, as the MACD has accelerated higher, and distanced itself from its red trigger line, whilst the RSI inclines into the overbought area. The ADX concurs indicating a strong trend in place.
If the bullish run up endures, the price could initially test the 99.00 hurdle before attention turns to the 99.33 resistance, which is the 138.2% Fibo retracement level of the down move from 98.23 – 95.34. Stretching further, the 100.00 psychological level, which is also the 161.8% Fibo, could come into focus.
A misfire of the climb north, could see a pullback to the 98.23 support level. If selling interest picks up, the index could encounter some pressure around the 97.50 – 97.25 support areas, before testing the mid band and the 100-, 40- and 200-day SMAs, presently between 96.90 and 96.60.
Summarizing, long- and short-term bullish bias remains, and only a close below 96.30 could turn the bias to neutral.
