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Dollar spike brings potential bullish overall outlook
Yesterday saw price fall lower for the Dollar Basket, and hit our target at 05.93, yet despite selling off further, we have opened with a major gap higher, which has been followed up with a short-term pennant and subsequent break higher.
The price is now approaching the highly significant 96.75 resistance level which if broken would then point towards the crucial 96.89 level. Given that we have essentially been trading within a triangle formation over the past month (lower highs, higher lows) there has been little clear direction.
However, a break above 96.74 and in particular 96.89, would bring a clearer bullish picture into play. Thus, further short-term upside appears likely, yet how price responds to those levels are likely to dictate what the outlook is for the medium term in the dollar index.