Home » Currency Option Trading » US Dollar Index – Currency Options Trading 3rd June 2009

US Dollar Index – Currency Options Trading 3rd June 2009

US Dollar Index - Daily Chart For Trading Currency Options 3rd June 2009

Yesterday’s wide spread down bar on the US dollar index, simply added further momentum ( if any were needed) to the continuing and relentless pressure being applied to the US dollar at the moment, and it is hard to see at present where this will end. With all three moving averages weighing down heavily on the chart, and with any reversal bouncing off the 9 day moving average, this trend is well established, but for US dollar bulls there may be a glimmer of hope as the index approaches the 78.50 region, which has some minor support levels in place, and indeed in today’s early trading we have seen a small bounce back, with the index recovering to 79.06 in afternoon trading, largely as a result of worse than expected ADP employment numbers which were released earlier today. Whether one piece of fundamental news is sufficient to stem the tide is debatable, and from a technical perspective I would suggest that the index is more likely to find stronger support at a lower level, with the first of these being at 76, and if this fails then the secondary region at 73. Both of these areas have well established and broad support areas, and provide a more likely position for any reversal, but a failure to hold at either of these levels could signal a very deep move in the next few months. In the meantime, for any reversal to be established we would need to see a break and hold above both the 9 day and 14 day moving averages, coupled with a close above the strong resistance now in place at the 81 price region, and who knows, Friday’s NFP data could provide the trigger for the start of a comeback for the US dollar!

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