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Trading Currency Options – Dollar Index Daily Chart 19th May 2009

Dollar Index Daily Chart 19th May 2009

Dollar Index Daily Chart 19th May 2009

Last Wednesday’s bullish engulfing signal has failed to add any significant bullish momentum to the Dollar Index which continues to exhibit a sideways trend with a bias to the downside with Monday once again, reversing the gains of Friday and closing below all three moving averages.  With the index looking increasingly weak and consequently the US dollar it seems likely that we will see a return to the bearish trend in due course, particularly if the current sentiment buying in the equity markets continues unabated which seems to be case at present.  The key level for the dollar index is whether it approaches and re-tests the 80 price mark and if this is breached there is little in the way of support between here and 77.  With all three moving averages now weighing heavily downwards on the index it only seems a matter of time before we see a break lower.

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