Monday, January 9, 2012

Follow the Dollar

The U.S. Dollar Index

The dollar managed to slightly breach the upper end of the resistance zone in today's session, but failed to remain above it. The last 4 sessions have generated a substantial move so it seems unlikely that this level will be decisively broken on the first attempt. A second attempt should stage a large enuogh rally to successfully break through this resistance zone. So in the mean time, a pullback or sideways consolidation for the next several sessions would correspond with the market to drift higher.

The U.S. Dollar Index
It is when the dollar remains two sessions above the upper bollinger band that a reversal or pullback is due.

The SPX daily Chart
Overal this pattern is bearish, but it may continue sideways or push slightly higher if the dollar continues to correct.

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