Follow up on the Dollar Index

Yesterday we identified a possible hammer pattern on the Dollar index, daily chart and today such formation was confirmed by the bullish daily candle that has taken the index very close to the 93.00 level. The stochastics indicator has also confirmed the bullish cross above its signal line and it has come out of the overbought zone. Therefore, the Dollar index may continue rallying and it could break above the 93.00 level to enter the consolidation area between the 93.00 and the 94.00 level. The 94.00 could act as a resistance and that is why that in order to see a real trend reversal on the instrument, the index must break above the 55 day EMA (purple line) and above the 95.00 level. At the moment we are still waiting to see if the index is able to break above the 93.00 level, since that zone was a good support in the past and it could change to resistance.