Technical analysis of USDX for June 13, 2016

The Dollar index has given a very bullish signal like it did in early May by producing a bullish hammer candle on the weekly chart. We all remember the rally in the Dollar index from 92 to 96 last May, and there are several indicators that show that this could be repeated with a higher high near 98.

The Dollar index has reached its first important short-term resistance at 94.80 and is showing signs of rejection. A pullback at current levels is justified but Dollar bulls want to see a higher low being formed and then a break above 94.80. Short-term support is at 94.40 and at 94.05. A push below these levels will be a bad sign for the bullish scenario.

The weekly chart is bullish as we said above because last week's candle has formed a bullish hammer. Weekly resistance is at 94.80 and next at 95.90. Breaking above 95.90 will open the way for a move towards 97 at least. The index has so far made a higher low and has reversed upwards. A continuation of this uptrend could have bigger implications on the longer-term direction that for now makes me believe we are heading for new highs above 101-102.The material has been provided by InstaForex Company - www.instaforex.com