US Dollar Index: Continues To Head Lower

US Dollar Index-Continues to weaken pushing to a new 2007 low of $78.21 and resuming its medium term weakness Tuesday. The Index prices are expected to head further lower towards its psychological support at $78.00 and possibly beyond. On the other hand, respite may come on Index’s way now that its daily RSI and Stochastics are bottoming from its recent downside weakness. This suggests that consolidation to upside strength is expected initially towards its support turned resistance at $79.00,its psycho level followed by its .382 Ret ($82.13 to $ 78.21 decline)/Sept 18’07 at $79.71/85 and then its Aug 06’07/July 24’07 lows at $79.95/$80.01.The index’s medium and long term outlooks remain to the downside and should resume its weakness on any corrective recovery.

USDCHF: Sees Further Weakness

USDCHF –Shot to a low of 1.1737 on Tuesday, its lowest price printed since Mar 20’05.This development has increased the risks for further weakness targeting its Mar 06’07 low at 1.1479 with an invalidation of there opening the door for additional pressure towards Dec’04 low at 1.1287.This view is supported by bullishness on both the weekly and monthly RSI.Upside objectives are seen at the 1.1756 level, its Sept 24’07 high ahead of the 1.1800/15 zone, which is the location of its Aug 05’07/Sep 13’07 lows and then its .50 Ret(1.2214-1.1637 decline)/Sept 14’07 at 1.1922.