FXStreet (Delhi) – Stephanie Aymes, Analyst at Societe Generale, expects the dollar index to extend its uptrend for 2016, but a marginal new high to be followed by a consolidation phase in the near term. Key Quotes “The Dollar Index signalled a long-term uptrend after confirming a massive inverted head and shoulders formation last year and subsequently breaking above the down-pointing triangle pattern in force since the 1980s (currently at 93.25/92.50).” “Compelling similarities with price action in the 1990s can be drawn, as the Dollar Index then formed an identical base formation (double bottom coupled with an inverted head and shoulders). The Index rallied thereafter relentlessly, with shallow consolidation, towards the projected target of the pattern and the bullish USD cycle lasted for eight to nine years. Thus, the uptrend in the Dollar Index is poised to persist over the course of 2016, with a significant target located at 106.60/109.00, the pattern’s projected target and retracement levels of the previous down trend. Long-dated indicators suggest further upside before they achieve a major ceiling, suggesting bullish momentum remains vivid.” “The Index looks poised to head towards 103.30/104.10, a projection for the ongoing fifth wave from an Elliot standpoint. However, a consolidation cannot be ruled out once the aforementioned marginal highs are achieved. This is also indicated by weekly Stochastic, which is testing an important graphical ceiling (horizontal line). As witnessed back in 2008, 2010 and 2012, the Index has undergone pullbacks after the indicator tested this horizontal line. Eventually the up move is expected to persist in 2016.” For more information, read our latest forex news.