The US Dollar Index fell initially during the session on Wednesday, but the 81.30 level offers support yet again. Because of this, we ended up forming a hammer, which was preceded by a Tuesday shooting star. The 81.70 level looks to be resistive, and on a daily close above that level I believe that we go to the longer-term goal of 84. Granted, this isn’t going to be an easy move to make, and it certainly will take a certain amount of time. After all, it is a huge move but I believe we should be able to make that move, especially considering that there is so much trouble in Europe at the moment, and the EUR/USD pair does in fact contribute 40% of the movement in this contract.

That being the case, I think as long as Europe struggles, the US dollar should continue to do quite well. With that being the case, the market should continue higher and it fits and starts should be the order of the day. On top of that, the British pound now looks very soft, so that could only add fuel to the fire as far as I can see.

A safety play, as well as economic reality.

The US dollar can be a safety play in times of uncertainty. However, there is also the component of the US economy doing better than many other ones, so it makes sense that the US dollar of course would appreciate in general. I believe that the market has a massive amount of support at the 81 handle as well, considering that was a fairly significant move higher, and the 81.30 level has been resistive in the past also. With that being the case, I feel that the market should continue to have buyers every time he drops, and ultimately send this market higher based upon traders recognizing that the market is in fact going higher over the longer term, thereby sending more and more players on the long side as it allows profits.

Dollar index 81414

Related Articles
  1. Chart Advisor

    2 Short-Term and 2 Longer-Term Trade Ideas

    Two shorter-term and two longer-term trade ideas to consider, based on trends and the possibility of a breakout.
  2. Financial Advisors

    Becoming an Advisor: Why You Should Shadow a Pro

    Meeting with financial advisors and following them during a workday will help you to know if it’s worth the time and effort to make the career switch.
  3. Financial Advisors

    Paying for College: Top Ways to Budget and Save

    Saving for your kids' college education can be complex and expensive. Here are some popular vehicles that help perpetuate college funds.
  4. Financial Advisors

    Financial Fraud: 6 Tips to Avoid It

    A good financial planner should work with you and for you. Ensure you are paying attention if you don't want to be the victim of fraud.
  5. Stock Analysis

    Why Facebook Will Never Charge User Fees

    Understand why Facebook is unlikely to ever charge users; the site's business model of leveraging free users to charge advertisers is highly profitable.
  6. Financial Advisors

    HSAs and FSAs: How to Decide Between Them

    FSAs and HSAs are both excellent ways to help cover a portion of medical costs with pre-tax dollars. Here's how to decide between the two.
  7. Financial Advisors

    When to Develop a Client Mental Capacity Checklist

    Dementia and Alzheimer’s disease aren't uncommon for elderly clients. Here's how advisors can create a plan for when mental capacity becomes an issue.
  8. Retirement

    How Much Money Do You Need to Retire at 56?

    Who wouldn't want to retire early and enjoy the good life? The question is, "How much will it cost?" Here's a quick and dirty way to get an answer.
  9. Retirement

    The Best Strategies to Maximize Your Roth IRA

    If a Roth IRA makes sense for you, here are ways to build the biggest nest egg possible with it.
  10. Investing

    In Search of the Rate-Proof Portfolio

    After October’s better-than-expected employment report, a December Federal Reserve (Fed) liftoff is looking more likely than it was earlier this fall.
  1. Does dental insurance cover crowns?

    Dental insurance coverage may vary according to the type of plan and the level of benefits that you have elected. Most dental ... Read Full Answer >>
  2. Is South Korea a developed country?

    South Korea is widely regarded as a developed country. A few index providers still classify the country as developing, but ... Read Full Answer >>
  3. Do plane tickets get cheaper closer to the date of departure?

    The price of flights usually increases one month prior to the date of departure. Flights are usually cheapest between three ... Read Full Answer >>
  4. Is Turkey a developed country?

    There are no hard-and-fast criteria for what defines developed countries. Different organizations set different standards ... Read Full Answer >>
  5. Are secured personal loans better than unsecured loans?

    Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
  6. Is Israel a developed country?

    Israel is considered a developed country, although it has substantial poverty and large income gaps. The International Monetary ... Read Full Answer >>

You May Also Like

Trading Center