US Dollar Index - Daily Index Chart 2nd July 2009
The Dollar Index daily chart continued to consolidate sideways yesterday with Tuesday’s up bar largely being negated by yesterday’s price action which resulted in a narrow spread down bar which closed marginally below the 9 and 14 day moving averages. The chart is now moving towards a pennant formation, possibly awaiting the outcome of today’s NFP’s data before providing us with some much needed momentum and direction. There is, of course, the straight fight between Europe and the US for “manipulation” of their respective currencies which they need to either weaken or strengthen. In addition the mix is complicated by the Chinese perspective of the US Dollar and their desire to discuss the issue of the Dollar’s reserve status at next week’s G8 meeting. The bottom line is simply that geo political factors are now starting to dictate the future direction and price action for the Dollar Index, rather than simple and straightforward technical analysis, and with the Chinese sitting on a barrel load of US Dollars this may well prove to be seminal in the longer term.
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