USD Graphic Rewind: Dollar Index Posts Strong Weekly Close, Charts Point to Further Gains
The dollar index posted a second healthy day of gains Friday despite some choppy trade amid what looks to be the end of the Egyptian saga with President Mubarak formally resigning his post. The early gains made by the index proved to be enough for the buck to post a strong close despite Mubarak stepping down which lifted global equities. Over-night however, the index has pulled back as relief lifts Asian markets and some higher yielding assets at the cost of the buck. Meanwhile, with the euro unable to mount a reversal of the last few days of trade at present and remaining under pressure allows the index to only be a tad weaker at present.
The higher weekly close last week makes us think that we have based out on this most recent downtrend keeping the rising trend line of higher lows starting back in 2008 in tact. The index should now be poised to continue its climb in a measured fashion back above 80.00, if the buck can overcome early 2011 highs around 81.35 on its ascent it really opens up a more serious topside move.
Written by Jonathan Granby, DailyFX Research Team
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