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Dollar Index – Daily Chart 4th May 2009

US Dollar Index - Daily Currency Chart For US Dollar 4th May 2009

The dollar index is currently symptomatic of many of the major currency pairs at present with trading over the last few weeks epitomised by sideways consolidation in a relatively narrow trading range.  The breakout from the pennant of mid February failed to materialise into a significant move upwards and the index subsequently fell back below all three moving averages once again and now trades between 83 and 87.  Friday’s doji candle suggests that we may see a reversal of the last few day’s down move with possible dollar strength moving the index higher but still keeping within this narrow range.   For any break higher we need to see a move beyond 87 coupled with the support of all three moving averages and for any move lower and subsequent US dollar weakness we need to see a break below 83.

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