Bullish momentum continues to remain firmly in play for the US dollar on the longer term weekly chart, following the minor pull-back of last week, which saw the dollar index test the new platform of support now in place in the 12,155 area (as denoted by the pink dotted line). This was the resistance level duly breached as the index soared higher, driven by a very bullish figure for November’s monthly nonfarm payroll release, and closing the week at 12,210.61.
This bullish move higher was, as expected, following the rising triangle that had been building on the chart since late May, with the series of higher lows coupled with the continued testing of resistance in the 12,100, combining to create this strongly bullish signal, with NFP then providing the catalyst to drive the index through this level. So far this week, the 12,155 platform has held firm and continues to remain bullish in this timeframe.
Moving to the daily chart, today’s indecision for the US dollar has seen the index close with a long legged doji candle in the 12,186 area, suggesting a pause as further congestion builds in this region.
However, provided we see the 12,220 high of last week taken out, and with the deep congestion phase of the last few months now well below, this will then provide the requisite platform for further gains for the US dollar, with the FOMC no doubt injecting further momentum as Christmas approaches.