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USD Dollar Index 12 Feb 2010

Dollar Index Chart (weekly) 12 Feb 2010

The USD index looks like ending the week on a very positive note having broken above the 200 week moving average, a significant move, which suggests that the recent bullish trend is set to continue.  The deep lower wick to this week’s candle is indicative of dollar buying which has reversed earlier falls & helped to gather momentum for the current move higher.  The low of the week also found support marginally below the 80 level in the consolidation region of mid 2009.  With the 9 week moving average now crossing the 40 week moving average this also provides us with a bull cross signal and simply reaffirms the current bullish sentiment self evident in the dollar index.  Looking further ahead the next key level is around the 83 price handle where we begin to run into potentially stiff resistance first created in late 2008 through to mid 2009 (the height of the credit crisis).  This area could present a major stumbling block in the recovery of the USD index and only a break and hold above the 89 top would signal that we have cleared this difficult technical area.  Whilst this is some way off it does loom large on the weekly chart and we need to bear this in mind for our longer term trading.

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