When it comes to gauging the strength of the U.S. dollar, one of the things we often focus on is the performance of the USD Index (DX). The DX is a weighted average of six foreign currencies against the U.S. dollar. Currently, the index includes the Euro, the Japanese yen, the British pound, the Canadian dollar, the Swedish krona and the Swiss franc. On the weekly chart, the DX cleared its long term 30-year support level back in April 2006. In the same month, the breach of the Ichimoku cloud, which is designed to give support/resistance levels, trend direction, the strength of the trend and the potential entry/exit points, triggered the acceleration of a major selloff.
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