05.09.201411:42 Forex Analysis & Reviews: #USDX Technical analysis for September 5, 2014

Long-term review

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The US Dollar Index spiked yesterday following Mario Draghi's comments and the start of quatitative easing in Europe. The second target of 84 has been achieved and a few days of sideways consolidation should be expected before another move higher.

In yesterday's analysis my final comments were that the trend remains bullish and the next target is at 84. The index reached as high as 83.97 and is likely to make a bullish flag pattern in the 4-hour chart as shown above. The trend remains bullish. A break below 83.70 could push the price lower towards 83.50-83.40.

After such a huge spike up, the market needs a day or two of sideways action to digest what happened yesterday. The daily chart remains bullish. A trend reversal is still nowhere to be seen as the chart remains bullish with Ichimoku cloud and the red trend line below current market. Next target is the 85 level. Critical daily support is at 82.60.

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