Home » Currency Option Trading » US Dollar Index – Currency Options Trading 22nd May 2009

US Dollar Index – Currency Options Trading 22nd May 2009

US Dollar Index Daily Chart - 22nd May 2009

US Dollar Index Daily Chart - 22nd May 2009

The US dollar index continues to present us with a bearish picture as we approach our initial price target of 80 and yesterday’s wide spread  down bar confirmed once again the dark cloud over pattern seen earlier in the week.   With four consecutive down days and the prospect of a fifth day, despite thin market volume, there is little to suggest that we are likely to see any reversal soon and the first point at which this may occur is if the support currently in place at the 78.5 price level can provide a platform for the dollar index.  This support region is very fragile and should this fail to provide the requisite platform then we may see a deeper move still, possibly as far as 73, last seen in July 2008.  A check on the weekly chart shows a similar picture with the 9 week moving average about to cross the 40 week on a very wide spread down bar, so once again we have a very bearish picture.  The fundamental news which is likely to change this sentiment would, of course, be driven by a sustained decline in equities which could drive investors back to the semi safe haven status of the US dollar.

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