The dollar index continues to remain firmly bullish on the daily chart, moving higher and breaking above the 81 region, as the currency of first reserve continues to strengthen following the US election. This firm move higher for the US dollar has been accompanied by sustained buying volume on both the daily and the three day chart, which have both provided additional momentum to the move higher, following the key breakout from the sideways congestion created during September and October, which saw the index trade in a narrow range.
This platform of support is now providing the necessary springboard, and with the trading indicators now firmly green, the US dollar looks set to continue higher in the short to medium term. Should the three day trend also transition through to bullish in due course, then we can expect to see the index climb to test the 83.00 region and beyond with consequent weakness across the major currency pairs, along with commodities.
By Anna Coulling