The US Dollar Index chart as shown on this figure have clearly came from a HI/LO trading range between the 78.60 low and the 80.27 High spread over the September to the first week of November. Although, there were signals of a probable break then, it was only confirmed when the unexpected high numbers from the Non-Farm Payrolls provided the rally for the USD. Breaking the technical brarrier of the first resistance @80.05/10 and maintaining its price above the 80.55 basis point closing, have provided justification for the technical and fundamental rally.
As of the week ending Nov 09 2012; the USDx registered a new high at the 81.08 after breaking the 80.05 - 80.27 resistance range. Thus, establishing three (3) higher lows serving as a good support level with probable extensions beyond the 81.15 preliminary resistance. The next technical tool to be applied would be the Elliot Wave to determine the next leg higher and similar daily drawbacks for the USDx as it moves forward. This is a real classic example where the Donchian Channel breakout after a consolidation have been applied. And likewise using the financial futures of the USDx as a secondary market to arbitrage between the Spot Forex market with Euro and the Japanese Yen.
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