USD Index 9 Aug 2010
Friday’s poor non farm payroll numbers helped push the usd index through the 200 day moving average which ended the trading session a down candle but one with a small wick to the lower part of the body. It is the small wick which is the only straw onto which dollar bulls can cling to as it may provide just enough impetus to help push the index back towards the 81 price point. The low of Friday’s candle is probably more significant on the weekly usd index chart where it was the 200 week moving average which provided the last line of defence which has seen the usd index fall relentlessly for the last 9 week from a high of 88.7 to close on Friday at 80.37. Whether the index is able to rebase at the 80 price handle and find some traction remains to be seen as this week sees a slew of fundamental news from China and Japan as well as a critical interest rate decision from the FOMC on Tuesday. At the best of times such decision result in considerable market volatility but this week’s is against a US economy precariously poised to tip back into recession and a Federal Reserve which appears to have run out of options to prevent this happening.
