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The dollar index is showing nice gains today as it has cleared the first Fibonacci resistance at 80.40, suggesting a move to the 50% retracement resistance at 82. There is a strong barrier of chart and retracement resistance in the 84 area. Though the weekly on-balance volume (OBV) still suggests that this is a rally within the downtrend, the daily OBV is quite positive. Take a look at the pullback on Nov. 22 (see circle), during which the dollar index tested the former downtrend and the OBV tested its rising weighted moving average (WMA), which offered a good trade set-up.
Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.
