US Dollar Index - Daily Candle Chart 15th July 2009
This morning’s price action in the US Dollar Index has perhaps provided us with a portent of the fate of the US Dollar in the short term as the recent sideways consolidation begins to unwind and the Dollar Index begins to roll over like a stricken vessel, to sink quietly below the waves. Yesterday’s candle struggled to break above all three moving averages and ended the day in a compressed trading area and perhaps signalling that a breakout was imminent, which is occurring at the time of writing. We now need to consider how deep this move is likely to be which has largely been triggered by better than expected fundamental news on the economic calendar in the US this morning, signalling a creeping optimism in investor confidence as they begin to buy equities once again. The first port of call as we press the down button is that at 78.50 and if this is breached then we may well see a dramatically deeper fall, first towards the 75 region and then onwards towards 73/71 area, last seen in late August 2008.
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