US Dollar Index – What the Bulls Need To Happen
25 September 2009
Over the last few months the Dollar Index has been grinding lower, recently reaching a Fibonacci projection we had been looking at. However, there is nothing bullish about the daily chart yet – there are certain hurdles that bulls need to get round before a recovery phase can be trumpeted.
MONTHLY CHART:
The earlier breach of a bear channel top projection suggested to us that long term downward momentum was on the wane.
When a new trend is trying to develop, a deep initial pullback is quite usual.
Here the 76.4% level just above 75.00 offers support.
DAILY CHART:
Our Fibo projection has been tested/eroded now (on some other charts of currency pairs it hasn’t worked so well, except as a minimum target, not as resistance/ support).
Immediate resistance is offered by the prior 77.428/77.688 lows.
But bulls need to see a close above the s/term bear channel top projection at 78.25 just now, for an initial signal.
Then, a further break through the 23.6% recovery level of the whole decline from Mar 89.624 high, just above 79.00, would provide bullish confirmation.
We would then target the 81.466 Jun high area, which lies near to the 38.2% level (which relates to our Fibo projection).
Next story:
Does the Bank want a weak Pound? 
Previous story:
EUA Carbon Emissions – How Far for the Bears?