US Dollar Index Technical Analysis
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The US Dollar Index is the weighted geometric mean against some of the most important currencies of the world.
As a result, the US Dollar Index gives a very good indication of the standing of the US Dollar in the world economy and on the forex spread betting markets.
US Dollar Index
The currencies included in the index are:
US Dollar Index Technical Analysis
If we look at the chart below, we can see that for the best part of August, the Index moved mainly sideways, staying in a narrow band between 73.5 and 75.5.
On the 5th of September, it moved above the Ichimoku Kinko Hyo cloud for the first time in quite a while, closing at 75.16. The next day saw the beginning of a relatively strong bull run that lasted for the majority of September.
On the 4th of October, the price briefly touched 79.84 before starting to drop, closing at 78.96. Since then it has dropped below the red Tenkan Sen line and also below the blue Kijun Sen.
Right now, it is still safely above the Ichimoku cloud, but on the 19th of October, we saw the price briefly touch the cloud at 75.83, the lowest point it has reached in more than a month.
Technical analysis suggests that if the price closes in the Ichimoku cloud soon, it will officially be the end of the bull run. Should it then emerge from the cloud in a downwards direction, short traders might start to look for an entry point.
Right now, the price will have to increase significantly, rising above the level it reached on the 4th of October, to consider a long trade.
Good luck and happy trading
Shai Heffetz, InterTrader
(Original article written 20 October 2011).
Spread betting carries a high level of risk and you can lose more than your initial deposit, so you should ensure spread betting meets your investment objectives.
The contents of this report are for information purposes only. It is not intended as a recommendation to trade. Neither InterTrader nor CleanFinancial.com accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.
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'US Dollar Index Technical Analysis' edited by DB, updated 20-Oct-11
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