The Dollar index has finally reached our the target area around 100-101.50 and I believe the upside potential of this index is still alive. We might see another dollar pull back this week but the longer-term trend remains fully bullish. An important monthly resistance is at 101.50.
Green line= trend line support
The Dollar index remains in a bullish trend in all time frames. A short-term support is found at 99,75 while resistance is at 101.50. The next support is at 98.70. Bulls need to be very cautious at current levels and raise their stops to protect long positions because we have approached a very strong monthly resistance level. If the dollar is going to make a trend reversal and correction to the downside, this is the level where it is likely to happen. It does not mean that we should start opening short positions. On the contrary, this up trend is so strong that traders going short were wiped all way up here. This is likely to continue. However, traders should raise their stops for protection as a rise from the 80 level has been quite parabolic.
The monthly chart shows how price has almost reached the 61.8% retracement of the decline from 2000. The rise from 80 level is parabolic and the reversal will be steep. Bhat is why bulls need to be protected.
The material has been provided by InstaForex Company - www.instaforex.com
