Daily Chart For The US Dollar Index - 18th March 2010
The US dollar index on the daily chart, continues to struggle in the 79 to 81 price region, as once again yesterday’s price action closed below all three short term moving averages, but with substantial clear water to the 200 day moving average below. This failure to break above the 81.50 price point is now becoming a worrying sign, which is further reinforced with the rounded top pattern now being created as a result. Yesterday’s candle provides little in the way of any meaningful analysis, ending the day as a small doji cross, and with the 9 and 14 day moving averages now adding further downwards pressure, the short term outlook for the US dollar looks mildly bearish. As outlined in several previous market commentaries for the USD index, the series of candles with deep upper wicks, during mid to late February, were the first signal of a change in sentiment, with the rollover on the daily chart as a result. Longer term the outlook for the index remains bullish, provided we see a break and hold above the 81.50 price region in due course. Once this has been achieved then we can expect to see the dollar index break higher with the current sideways congestion providing a strong platform of support, with the recent price action simply indicating an extended breather for the market and the US before the index moves firmly higher once again. Any move to the downside, if it comes, should find good support from the 200 day moving average, so any test lower should be limited to the 78 price point or just below.
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