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The Dow Jones FXCM US Dollar Index looks to be attempting to set a double bottom at 10375, the October 22 close. Confirmation of the upward reversal pattern requires a breach of resistance is at 10458, marked by the top of a falling channel that has guided the benchmark currency downward since the beginning of the year. A daily close above this barrier initially targets horizontal support-turned-resistance at 10495.
Our long-term fundamental outlook still favors a broadly stronger US Dollar against its key counterparts in the months ahead. As such, we remain long the greenback via theMirror Trader US Dollar currency basket.
Daily Chart - Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com