The 2011 downleg in the US Dollar Indexearlier found support on the long term chart and produced an initial reversal sign in early May, holding above the major 2008 low. A bull signal is still awaited, however.

  • WEEKLY CHART Note how support has come from the bear channel base projection, following the brief breach of the 74.170 Nov-09 low. The start of the recovery was marked by a key reversal weekin early May, which provided an initial bull sign. Further recovery could find resistance from the rising return line.
  • DAILY CHART The Index remains below the 38.2% recovery level, with the early May key reversal week still providing a positive backdrop. A clear break of this would provide the first bull signal. Note that key resistance lies higher, at the channel top at 78.400 –a more lasting recovery phase would be likely if this was clearly breached. Meanwhile s/term support comes from the 76.4% pullback at 73.560.

For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com