US Dollar Index: Dollar rises to new multi-week high, signaling bullish continuation


US Dollar Index

The US dollar rose to new six week high in early Friday’s trading, with fresh extension higher signaling continuation of the bull-leg from 100.66 (2023 low, posted on Feb 2), which paused for eight-day consolidation.

The greenback remains well supported by growing expectations for further rate hikes by the Fed after US inflation rose above expectations in January, while weak UK German data released today, added pressure on greenback’s major counterparts.

Break above the recent congestion and penetration of falling thick daily cloud, signal that dollar regained traction and resuming rally.

Bulls cracked pivotal barrier at 104.32 (top of rising weekly cloud, opening way for test of 105.39 (2023 high, posted on Jan 6).

Bullish momentum continues to rise on daily chart and underpins near-term action, along with a number of bull-crosses of daily moving averages (10;20;30;55), although overbought stochastic gives initial warning of consolidation in coming sessions.

The greenback is also on track for the third consecutive bullish week, with additional positive signal expected on today’s close above rising weekly Ichimoku cloud, which would become support and further underpin the action.

Recent range tops at 104.00 zone, now offer initial support, followed by broken Fibo barrier at 103.58 (61.8% of 105.39/100.68), with daily cloud base (103.65) marking key support, which should limit potential dips and keep bulls in play.

Res: 104.63; 105.04; 105.39; 105.78.
Sup: 104.28; 103.80; 103.65; 103.40.