The Dollar Index may rise to match the highest level since July 2010 after completing a “bullish outside month,” Citigroup Inc. said, citing trading patterns.
The gauge yesterday closed at 81.95 in New York, rising 3.5 percent in February, the biggest monthly advance since May. A close above 80.87 would signal further gains targeting 82.75 and then 84.10 for the Intercontinental Exchange Inc. index, analysts led by Tom Fitzpatrick, chief technical analyst at Citigroup in New York, wrote in a note to clients yesterday.
“Additional signs are coming through that a significant rally lies ahead on the DXY index,” Fitzpatrick wrote. “The target here is 82.75 though we would not be surprised to see a move to resistance at 84.10.”
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, was little changed at 81.89 as of 11:33 a.m. in Tokyo, set for a 0.5 percent weekly advance.
It last rose as high as 84.10 on July 24. That was its strongest level since July 2010.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support refers to an area on a graph where analysts predict buy orders may be clustered while sell orders may be grouped around an area of resistance.