US Dollar Index Daily Chart - 1st June 2009
Yesterday’s moderate show of dollar strength as reflected in the daily chart for the Dollar Index was more of a reaction to end of month and end of quarter liquidations and position squaring rather than any firm evidence of a shift in the market sentiment towards the US Dollar. Indeed it could be said that the fate of the US Dollar is inextricably linked to both NFP Employment Data and ECB interest rate statement and by association crude oil prices, which will collide tomorrow at 13.30 GMT at which point we may have some clue as to the future direction for the Dollar Index. From a technical perspective yesterday’s up bar, whilst an encouraging sign failed to close above the 9 and 14 day moving averages, and indeed it could be argued that these acted as an obstacle to any move higher and until the fundamental news is released tomorrow it seems that we may have a further day of sideways consolidation at the 79-81 price range. The 40 day moving average is still weighing heavily on the index and until we see a sustained break and hold above the 81.50 region coupled with solid support from all three moving averages, then the Dollar Index seems destined to remain in this desultory and waterlogged trading pattern.
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