Dollar Index Price Analysis: The DXY bounces off the 96.80 support level to push higher

• The dollar index recovers from trading lower earlier in the EU session on Thursday.
• There was a confluence support zone at 96.83 which the market bounced off.

Dollar index 1-hour chart

After trading lower for most of Thursday the dollar index pushed higher after the latest NFP data beat estimates. Looking at the chart below the price bounced off the red horizontal line which matched up with the orange diagonal upward trendline. The bulls then had enough momentum to break through the black resistance zone at 97.11.

The next resistance zone on the way up is the blue line at 97.60. Beyond that, the high on the chart of 97.80 could be the main target for the bulls. In the background of the chart, there is a bull flag formation and a break out could give us some further clues on the future trajectory of the dollar basket.

The technical indicators are both showing bullish signals. The Relative Strength Index is resting near the 50 line after breaking above the level earlier in the session. The MACD histogram is firmly in the green and one of the signal lines has moved above zero with the other one lagging just slightly behind. 

Overall on the higher timeframes, the dollar index in a consolidation zone. Also on the daily chart if the price closes anywhere near the current level it would be a hammer candle which would be a bullish signal. The main resistance, however, is still the top of the consolidation at the aforementioned 97.80.

Additional levels