FX.co ★ New highs for the Dollar index.

The Dollar index is making new weekly highs. Price remains inside the medium-term bullish channel and is now approaching the upper channel boundary. On a weekly basis the RSI is not making new highs providing a bearish divergence. Traders need to be very cautious.

The last time price was challenging the lower channel boundary, we mentioned that as long as price respects the channel boundaries, bulls remain in control of the trend. Price has now exploded to new weekly highs and although there is no sign of a reversal, at current levels we prefer to take partial profits in open long Dollar positions. Current market conditions justify a reversal if not a major top to be seen in the Dollar index chart. Traders need to be very cautious and bulls must protect their gains.