By FXEmpire.com
The US Dollar Index had a slightly negative session on Monday, but did remain within the up trending channel that we’ve been watching lately. The candle did form something that looks a bit like a hammer, and as such we think that Dollar strength could be coming in the relative near term.
This might not necessarily be about the US dollar itself. Remember, the Euro makes up about 40% of the weight of this index, and this could be signaling that we are about to see another round of Euro weakness.
Either way, we think that a break above the 83 level clears the way to 84 and possibly even higher. We would become very bullish above the 83 level, and would be willing to hang on until we saw 84.50 or so. As for selling the “Dixie”, we would need to see the 81.50 level get broken to the downside on a daily close.
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Originally posted here
