Dollar Index Weekly Technical Outlook – March 15, 2010
FMX | Connect –www.fmxconnect.com - (Reported 3/15/10)
Chart 1: Daily Front Month Dollar Index (short-term analysis):
Weekly Recap:
The dollar index has been consolidating (decreasing volatility) within the bounds of a channel formation, and on Friday closed just above the lower bound. The upper bound of the channel is at 81.35, while the lower is at 79.60. At the start of the week the dollar hovered just above resistance at 80.45 struggling to find a direction, and on Friday Goldman Sachs came out with a recommendation to buy the Euro, sending the dollar down three quarters of a percent to close at 79.84.
Weekly Outlook:
This week, traders will be closely monitoring the the lower bound of the channel formation (79.60). A close below this level could potentially trigger more selling. In the event of a close below this level, further support can be found at the 50-day MA, followed by the 79.15 and 78.20 levels. If the dollar shows strength, look for inter-channel resistance at 80.45, followed by the top channel line @ 81.35.
Technical Statistics:
DXH0 - U.S. Dollar Index March 2010 (ICEFI)
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| | | | | |
| Date | Open | High | Low | Last | Change |
| 3/15/2010 | 79.77 | 79.9 | 79.765 | 79.9 | 0.06 |
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| Period | Moving Average | Price Change | Percent Change | Average Volume | |
| 5-Day | 80.225 | -0.555 | -0.69% | 22880 | |
| 20-Day | 80.452 | -0.51 | -0.63% | 24244 | |
| 50-Day | 79.392 | 1.625 | 2.08% | 22101 | |
| 100-Day | 77.902 | 4.095 | 5.40% | 13825 | |
| 200-Day | 78.519 | -0.31 | -0.39% | 0 | |
| Year to Date | 79.415 | 1.68 | 2.15% | 22390 | |
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| Period | Raw Stochastic | Stochastic %K | Stochastic %D | Average True Range | |
| 9-Day | 19.69% | 26.76% | 34.71% | 0.566 | |
| 14-Day | 14.79% | 25.52% | 35.76% | 0.605 | |
| 20-Day | 15.93% | 29.04% | 41.04% | 0.622 | |
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| Period | Relative Strength | Percent R | Historic Volatility | MACD Oscillator | |
| 9-Day | 39.93% | 80.31% | 6.16% | -0.276 | |
| 14-Day | 46.96% | 85.21% | 5.59% | -0.42 | |
| 20-Day | 51.13% | 84.07% | 6.74% | -0.434 | |
| 50-Day | 53.31% | 32.62% | 6.88% | 0.627 | |
| 100-Day | 49.25% | 22.22% | 7.92% | 2.116 | |
Chart 2: Weekly Front Month Dollar Index (long-term analysis):
Long-Term Outlook:
The dollar index may be forming a head and shoulders pattern, which would coincide with the inverse head and shoulders on the gold chart (click for gold technical report). The neckline will be critical in determining the fulfillment of this pattern. If it’s tested and holds, it will provide the foundations for the right shoulder to form. A break below the neckline will negate the pattern.
julian@fmxconnect.com
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