FX.co ★ Technical analysis of USDX for June 24, 2016

The dollar strengthened yesterday because of the result in the UK referendum. The result pushed traders to buy the Dollar against major currencies like the Pound and Euro. The only Dollar pair that weakened was relative to JPY.

Red line - resistance (broken)

The Dollar index has broken above the red trend line resistance and the Kumo (cloud). This breakout is an important event as no one expected the result of the referendum to be a BREXIT. However, the chances of a rate hike in 2017 are now zero, and this could put some pressure on the Dollar, but overall, the weakness in the Euro and the Pound are affecting the index positively.

As I said in my previous analysis, Dollar bulls needed a sharp rise above the weekly Kumo and above the red downward sloping trend line resistance. The result of the referendum was the main trigger for this upward move. The price is now testing the weekly Kijun-sen (yellow line indicator). A break above the weekly cloud will be a very bullish signal that will target new highs for the index.