Home » Currency Option Trading » Currency Options Trading – Dollar Index 7th January 2010

Currency Options Trading – Dollar Index 7th January 2010

Currency Options Trading - Monthly Chart USD Index 7th January 2010

At times of great change I always feel that it is more valuable to take a longer term view of the markets for currency options trading, and with so much talk of a resurgent US dollar, I thought it would be useful to look at the monthly chart for the dollar index, which reveals in glorious technicolor the depth of move and how far we have travelled since the heady days of 2002 at 120 plus! So with Non Farm Payroll waiting in the wings tomorrow, what is next for the once mighty US dollar, and with the whispering campaign in full swing, most currency pairs are trading sideways at present as we await the figures. From a technical perspective, last month’s wide spread up candle has given us a bullish engulfing signal for the longer term, and may well be the precursor to a full scale recovery for the dollar. However, it is interesting to note that the high of the month found resistance at the 9 month moving average, suggesting that any recovery is going to be hard fought, and with the deep and established potential resistance in the 90 price region, any move higher will need to see sustained and continued momentum in order to breach these significant levels. In the short term we need to see the monthly chart break above all three moving averages, which should then provide the necessary support for a sustained move higher later in the year.

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