USD Index 14 Sep 2010
Despite last week’s gain for the usd index on the weekly chart this key indicator of dollar and market sentiment has opened gapped down this week once again confirming the fragile state of the US dollar. The index continues to trade with a bearish tone and despite last week’s move above the 9 week moving average over the last three weeks we have seen attempts to break the 14 week average fail repeatedly and this indicator is now adding considerable pressure to the downside as a result. The opening this week has again confirmed this bearish picture as the usd index clings to the 40 week moving average at 81.89 which looks increasingly fragile as a result. It now appears that the recent rally which saw the index move from the 80 price point and 200 week moving average to a high of 83.55 is now over and, as such, appears to be minor leg up in the longer term downwards trend. The key for the next few days will be the 200 week moving average and any breach of this critical indicator will signify the resumption of this longer term trend lower, particularly if the index breaches the potential support at 79.51.
