US Dollar Index: With the index halting its four-day weakness to close higher the past week, the US Dollar Index is entering the new week biased to the upside. This suggests a follow through higher could towards the 80.39 level with a violation of there extending further strength towards the 81.78 level, its Jan 2012 high. A breather may occur here but if that level breaks, further upside gains should build up towards the 83.55 level, its Aug’2011 high. Further out, resistance resides at the 84.55 level. Its weekly RSI is bullish and pointing higher suggesting further strength. Alternatively, its Feb 06’2012 low at 78.36 level comes in as the initial target with a breach of there turning attention to the 77.97 level and then the 76.71 level. A possible bounce higher could occur here but if taken out, the Index could face further downside pressure towards the 73.42 level, its July 27’2011 low. All in all, the Index may be trading below its recent high but continues to retain its medium term upside bias.
