Home » Currency Option Trading » Dollar Index – Daily Chart For US Dollar 10th August 2009

Dollar Index – Daily Chart For US Dollar 10th August 2009

US Dollar Index - Daily Candle Chart 10th August 2009

US Dollar Index - Daily Candle Chart 10th August 2009

Friday’s wide spread up candle, finally provided some much needed help for the battered US dollar on the dollar index chart, but as I always say, one swallow does not make a summer, and there is a long way to go before we can assume that this is a full reversal in US dollar sentiment. With such severe congestion ahead any recovery will require a massive shift in investor sentiment if a reversal and move higher is to be maintained for anything longer than a few days, and the first problem is that the index needs to break and hold above the strong resistance now in place on the daily chart between the 79.50 and 81.0 price levels. Friday’s close finished above both the 9 day and 14 day moving averages, an encouraging signal, but with the FOMC two day meeting due to start shortly, the week could once again be dominated by one piece of fundamental news, as was last week with the NFP on Friday. So for any sustained rally we need to see two things – firstly a break and weekly close above the 81 price handle, and secondly a breach of the 40 day moving which should then provide the support required for the US dollar index to climb higher. With the thin trading volumes now a feature of the markets, trading can be volatile, and unpredictable, and this could be the case on Wednesday with the FOMC as the markets now wait for the next major piece of news.

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