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US Dollar Index – 18th March 2009

US Dollar Index - Daily Candle Chart 18th March 2009

US Dollar Index - Daily Candle Chart 18th March 2009

Yesterday’s down candle, with a deep upper wick merely served to reinforce the bearish momentum in the US dollar index, making this the sixth down day in a row. The index is now approaching the support area at 86, and with a move lower in today’s morning session, we could see a test of this later today, particularly with the influential figures of core CPI and oil inventories, capped off in the evening session with the FOMC Fed Funds Rate decision, which is guaranteed to bring some volatility into the market. This region will prove crucial to the future direction of the index and the US dollar – if it holds then we could see a bounce back higher, and if it fails, then we could see a move back to retest lower, possibly as low as 83 or 83.50. With all the candles of the last few days showing failed attempts to rise, then the downward sentiment seems set to continue until we see a stron reversal pattern in the daily chart.