The US Dollar Index initially fell during the course of the day on Thursday, bouncing off of the 81.40 level. The resulting bounce formed a hammer, and that of course suggests that we are going to see buying pressure again. I believe that the market is ready to break out to the upside soon, and as a result a break above the top of the range for the Thursday session has this market going much higher, and I have to state here that my longer-term target is the 84 level.
That being the case, I think that I should also state that the market will more than likely have a lot of choppy action between here and the 84 level, so I feel that pullbacks will continue to be offered as opportunities to go long. I think that the short-term traders will continue to push the value the US dollar higher, and as a result this is a trade that I will probably get to again and again.
Current consolidation is a good sign.
The current consolidation that I see in this market tells me that the market more than likely still has plenty of bullish pressure, as after and an impulsive move like this it is often a good sign for the markets take a rest, as we can build up more momentum to continue the next leg higher.
I think that pullbacks will continue to offer buying opportunities in this general vicinity as well, and that the 81 level below there should be massively supportive as well. After all, it was the site of a significant breakout previously, and with that I believe that it should offer nice support going forward. This area would be an excellent opportunity on a supportive candle, and I would not hesitate to get involved at that point in time. If we get below there, the market could change its overall attitude, so I would have to rethink my attitude about this market, but I really doubt that we are going to see enough bearish pressure against the US dollar to have that happen.