US Dollar Index: Although price hesitation has set in turning US Index lower off the 81.78 level, it continues to hold on to its medium term uptrend triggered from the 72.69 level. This development leaves the possibility of a return to the 81.78 level where a breach will extend further strength towards the 74.72 level, its Oct 2011 low. Further out, its key resistance zone standing at the 81.31/44 will come in as the next upside target. The Index will have to decisively break and hold above that zone to advance further towards the 82.82 level, its .618 Fib Ret (88.70-72.69 declines) with a breach of there turning attention to the 83.55 level, its Aug’2011 high. Alternatively, on the down side, the 79.51 level, its Jan 03’2012 high will come in as the immediate support where a break will aim at the 77.97 level and then the 76.71 level. A possible bounce higher could occur here but if taken out, the Index will face further downside pressure towards the 73.42 level, its July 27’2011 low. All in all, the Index may have backed off higher prices but continues to retain its medium term bullish tone.
