Usd Index 8 Sep 2010
Yesterday’s modest recovery for the usd index saw the forex trading session end on the daily chart as a relatively wide spread up candle which held just above all four moving averages and close at 82.91 on the day. Whilst this came as a welcome boost to dollar bulls it is far too early to suggest that this is anything other than a minor pullback and the extent of this small rally gives us very little clue as to the longer term. The only firm conclusion that can be drawn from the past few days is that the 200 day moving average has remained intact and therefore suggests that any breakout from the current sideways trading range between 82 and 83.53, may come to the upside in due course. Until this occurs we are likely to see further periods of sideways consolidation but any bearish bias will test the 200 day moving average and any break and hold beneath this key indicator will signal a fall with a possible re-test of August’s low at 80.85.
