US Dollar Index - Daily Chart USD 6th July 2009
Friday’s doji candle provided little in the way of guidance or meaningful analysis given that the US market was closed for the 4th July national holiday, and the only minor point to note was that the low of the day found support from the 9 day moving average. The significant news event of the weekend for the US Dollar was the statement by ECB President Trichet in which he fully endorsed the US Dollar as the world’s reserve currency, in effect sending a clear message to the forex market that the time has come to buy the US Dollar once again and consequently sell the Euro. As a result in early trading this has produced a strong rebound in the Dollar Index which is now currently holding the 40 day moving average and looks set to continue further. The key to any sustained rally will be the demolition of the various obstacles now in its path as we move higher, the first of which is minor resistance at the 82.50 to 83 region, followed by the more significant level between 84 and 87. For any sustained rally we will need to see a break above and hold above this last figure which in turn would then signal a major rally in the US Dollar.
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