US Dollar Index

Monday's wide spread down candle on the US dollar index, did little to lift the gloomy picture for the US dollar, adding further to the heavily bearish picture of the last few weeks, further emphasized by the gapped down opening of Monday morning which simply reinforces this view. With all three moving averages now beginning to unwind, and the 9 day movong average turning sharply lower, there seems to be only one direction for the US dollar at present, which is now heading South, fast!  The depth and speed of the move lower will largely depend on the next two days of testimony by Fed Chairman Ben Bernanke and should his comments and tone be relatively bullish overall, then this could trigger a further return of risk appetite with a consequent uplift in equities to the detriment of the poor old US dollar. From a technical perspective, if the 78.50 price level is breached, which now seems imminent, then the next barrier level is an intermediate one at 76, and should this fail to provide any support then a much deeper move should be expected back to retest support in the 71 - 72 price region in due course. The fate of the US dollar in the short term now hangs in the balance as Bernanke prepares to speak.