The Dollar index made a strong reversal yesterday after the FOMC statement. Dollar’s weakness prevailed the markets after the FOMC announcements but the picture is different today. Dollar bulls are back in control pushing the dollar higher reversing the bearish picture we got yesterday.
The Dollar index broke below the support at 99.30 and reached the 61.8% retracement of the rise from 94. The Dollar index has sharply reversed upwards after reaching this support level and any pullback towards 98-97 is a buy opportunity with yesterday’s lows as stop. I believe the correction was steep and fast and is over now. I believe the Dollar index is heading towards new highs and any pullback is a buy opportunity.
As shown above on the monthly chart, the Dollar index has managed to push the price towards the monthly tenkan-sen support to back test the break out at 96 So, I believe we are ready to push to new highs now. I have been warning bulls that their stops should be raised in order to protect themselves. Stops would have protected bulls exit their longs above 99 early yesterday and would have an opportunity to buy much lower again. As long as we hold above the level of 96, I remain bullish. My next target is 101.50.
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