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USD Index 7th June 2010

USD Index 7th June 2010

Friday’s wide spread up candle on the daily dollar index chart propelled the US dollar against a basket of currencies, finally breaking out of the recent pennant formation which had been forming in the 87 price area.  Friday’s break out is significant as it signals a reaffirmation of bullish sentiment on the daily dollar index chart as we now look set to attack the 89.62 area, last seen in February 2009 where that particular rally failed.  The monthly chart, along with the weekly chart, are both looking firmly bullish with a double bottom pattern now well established on the former.  The longer term target for the index is now 92.63 and should this point be breached then expect to see a run towards the next top at 99.49 and then on towards the psychological 100 price handle.

This bullish sentiment is further confirmed on the monthly chart with the 9 month moving average now crossing above both the 14 and 40 month moving averages, adding further weight to this positive view.

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