2012.05.04 22:40:01 CHARTING MARKETS: Dollar Index Is Midway To A Bull Run

--The ICE Dollar index is breaking out above 79.416 and it's going for 80.738 --Tentative support is 79.416 By Stephen Cox, CMT A DOW JONES NEWSWIRES COLUMN NEW YORK (Dow Jones)--The dollar's range trading over the last two months is winding down in favor of a bull trend. Earlier Friday, the U.S. jobs report for April was followed by a technical breakout of the ICE Dollar Index, a proxy for the dollar. This could be because the weaker-than-expected payrolls number sparked concern over global growth and safe-haven flows into the U.S. currency. Conversely, it could be because revisions to prior months improved the overall picture of the U.S. labor market. Either way, the dollar's response means that, at the very least, the index will test resistance at the top of its current trading range. Generally, the break Friday above 79.416 can fairly be termed indecisive. But it nonetheless managed to put in an intraday high of 79.523. The current technical set-up is easily explained. The index's latest downtrend bottomed at 78.095 on February 29, the low of that month. From that low, the index trended smartly up to 80.738, the March high, on March 15. Note that the midpoint between 78.095 and 79.416 is 79.416. A decisive move above 79.416 would clinch a revisit of 80.738. In case of a higher move, the index would be going for 83-area resistance. (Stephen Cox, a chartered market technician, is chief technician for Dow Jones Newswires. He can be reached at 212-416-2212 or by email: stephen.cox@dowjones.com) (Data by CQG) TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments. (END) Dow Jones Newswires May 04, 2012 16:40 ET (20:40 GMT)