Home » Currency Option Trading » Currency Options Trading – Dollar Index Weekly Chart 12th January 2010

Currency Options Trading – Dollar Index Weekly Chart 12th January 2010

Dollar Index Chart - 12th january 2010

Dollar Index Chart - 12th january 2010

The US dollar index ended on Friday with a distinctly bearish candle for currency options trading on the weekly chart, following the poor NFP data which saw a loss of 85,000 jobs in the US economy for the month. Many analysts had been forecasting a small increase in jobs created, and as result sentiment towards the dollar turned as the prospect of increasing interest rates in the short term receded once again, with the
weekly candle ending as a small shooting star configuration with a deep upper shadow and small body. In the last three weeks the positive sentiment towards the US dollar has waned once again following the strong surge higher during much of December, and the USD index chart now looks weak once again, particulalry as the high of last week seemed to find some resistance from tje 40 week moving average – not a good signal. Whilst the longer term outlook for the US dollar is a return to strength in due couse, in the short term the outlook remains bearish with the 78 price handle proving to be a stubborn area of resistance, with the next area at 80 waiting just above. So in summary , for currency options trading, in the short term we are likely to see a decline in the US dollar once again, if and until the fundamental news improves and the data points to a rate rise sooner rather than later.

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