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USD Index Chart 22 July 2009

USD Index 22 July 2009

USD Index 22 July 2009

Yesterday’s price action in the US dollar index, was of course dominated by the fundamental backdrop, as FED Chairman Ben Bernanke began his two day testimony on his twice a year monetary policy report before the House Financial Services Committee, in Washington DC, and no doubt we will see more of the same today, as he concludes his two day report. The daily candle on the dollar index chart, ended the session as a small hammer, suggesting that Bernanke’s comments provided some much needed support for the ailing US dollar, although this was far from emphatic, although from a technical perspective we may expect a small bounce in the dollar today as a result. In the medium term, this signal is certainly not strong enough to suggest that we have hit the bottom for the dollar, and whilst we may see a short term move higher, it seems unlikley at this stage that this will be anything other than the market taking a breather before moving lower, unless of course his statement today is dramatically different to the tone of yesterday’s comments, which seems unlikely.

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