Bulls in control
According to the US Dollar Index, year to date, the US dollar (USD) is nearly +5.0% higher against a basket of six major currencies. With the possibility of buyers strengthening their grip towards the 107.35 October 2023 peak on the monthly scale, things remain optimistic for the USD. This is reinforced by the monthly chart’s Relative Strength Index (RSI) rebounding from the 50.00 centreline and the daily chart showing price action retesting and holding support from 105.76 by way of a bullish outside reversal pattern on Friday. You will also note the potential bullish flag brewing between $106.52 and $105.74.
The above suggests buyers may continue to take control this week, even more so if a pattern breakout were to unfold. Upside objectives to be aware of in this market are resistance on the daily timeframe between $106.89 and $106.79, closely shadowed by the October 2023 peak underlined above.
All eyes on the bullish flag
In light of the above, technical hands, particularly more conservative buyers, may wait and see if daily price closes above the upper boundary of the bullish flag pattern to confirm bullish intent before committing.
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