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US Dollar Index – 12th March 2009

US Dollar Index - Daily Candle Chart 12th March 2009

US Dollar Index - Daily Candle Chart 12th March 2009

As usual with our currency options analysis we start with a look at the US dollar index, and yesterday’s sharp fall on the day, left us with a wide spread down bar, closing below both the 9 day and 14 day moving averages. Following the bearish engulfing signal of last week, and coupled with the two shooting stars and hanging man of Tuesday, this came as no great surprise, with the index now looking decidedly bearish in the short term, having failed to move above the clear resistance at 89.50. If the downwards pressure continues then we could see a fall to retest support at 86.40, whilst a move higher will need to push above the resistance now established at 89.50. The US dollar index now has a bearish tone, following the last few days of sideways movement, and a strong candle pattern will need to be formed before we see a resumption of the upwards trend.