Home » Currency Option Trading » US Dollar Index – Currency Options Trading 26th May 2009

US Dollar Index – Currency Options Trading 26th May 2009

US Dollar Index Daily Chart - 26th Ma 2009

US Dollar Index Daily Chart - 26th Ma 2009

Despite the crisis with North Korea the only conclusion that we can reasonably draw from the dollar index at present is that dollar weakness seems likely to continue for some time and only a major reversal coupled with some significant momentum will stop the relentless fall of the index which is now at the 80 price point.   With all three moving averages now pointing sharply down and with little in the way of significant support below the current price point we could even see a return to the 73 area in due course.   Further downward momentum to the dollar index may also come from the worries in the US bond market with investors becoming increasingly nervous of the US’s ability to continue to sell T-bills and with both China and Russia openly questioning the role of the US dollar as the world’s reserve currency this could add some impetus to a long term decline.  Indeed the weekly dollar index chart would seem to reinforce this view with last week’s price having fallen below the support at 81 last seen in 2006.

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