As a follow up to my previous Euro post I thought I would look at the dollar index and where it might be headed. The dollar index futures have been in bullish mode for most of November as it bounces off its 13 day EMA and holds the 200 day at 76.79. It has now gotten above and CLOSED above the 61.8% retracement of the down move during October that took the dollar from 80.46 to 74.86. Because of this I think it will bring in more buyers on any dip back to the mean. I think at the least there should be a retest of 80 coming soon and eventually Fibonacci extension targets as shown in the chart point to a move up to 81.94. This fib target would make alot of sense because it matches up with the 52 week high from January at 81.63.
If the move really gets legs in the longer term the second target would be the 161.8% fib extension of 83.87. That would be quite a move and while I doubt we see it that high...the possibility exists.
The TTM wave in the chart is positive saying bulls are in control in this timeframe. Momentum in the squeeze is rising also. If the dollar index continues to rally towards 80 it would make sense the foreign currencies like AUD, CAD, BP, EUR would sell off and all of these daily charts are in bearish trends at the moment so it matches up well.
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