US Dollar

by: Bill Zimmer Monday, February 9th, 2009 at 9:50 am

There was quite a bit of chatter Friday about the Dollar Index breaking down. So today let’s take a look at this index on an intermediate term basis. Weekly Chart back to the September 2005 peak.

dly090209

Notice the Fibonacci retracement levels covering the Sept ’05 through April ’08 decline; the 78.6% retracement level acted as great resistance. The blue vertical lines are Fibonacci time zones; notice how nicely they’ve coincided with turning points. That next time line is out about 5 weeks from now.

Fortunately, or unfortunately, depending upon your views the previous low point during the week of December 12 was down at 77.69.  While I have no reason to suspect, that it might get there at this point, if that level were to break the dollar is in trouble as we would then have a series of lower highs and lower lows.

Wish to trade the dollar index: ETF’s are available to trade the Dollar Index – Bullish (UUP), Bearish (UDN).