USD Graphic Rewind: Dollar Index Extends Rally; Falling Trend Line Resistance at 77.30
The dollar index extended its gains into a second day (and is climbing again this morning) on Tuesday as the euro continues to lose ground and the greenback rose against almost all its major trading partners. While this certainly could be a period of consolidation after an intense multi-week slide for the index the way the market looks at present dollar gains look set to continue.
Looking (maybe optimistically) what the topside targets could be in the index, we have very little close by. The first level to overcome is this falling trend line off early 2011 highs, touching the February highs, the resistance comes in around 77.30. A break above this falling trend line opens up a move to 78.00 initially and toward 79.00 after that. We will have to wait and see, however, if this bout of USD strength will turn into a more significant period of dollar strength or is simply a head fake before heading lower toward 2010 lows at 75.60.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.