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USD Index 15 March 2010

USD Index Chart 15 March 2010

The USD index continues to struggle at the current price level with Friday’s relatively wide spread down bar adding further to the short term bearish picture now clearly evident.  Over the last few weeks we have seen the index attempt to breach the 81.50 price handle, only for it to fail and collapse back to re-test support at the 80 price point once again, and with several of these candles exhibiting shadows to the upper body this is adding further weight to this analysis.  Friday’s candle closed below both the 9 and 14 day moving averages but found support from the 40 day immediately below.  However, if this too is breached we can expect to see the index fall further, possibly to re-test support at 78 where the 200 day moving average awaits.  It was interesting to note that despite Friday’s positive retail sales in the US, which surprised the market, this failed to give the dollar any upwards momentum.  The key, longer term, for further sustained dollar strength is a break and hold above 81.50 on the daily chart.

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