Wesley Chapel, Florida, February 23, 2009 — The March U.S. dollar index futures on Monday dropped down to challenge an uptrend line drawn from the December and February lows on the daily bar chart, but then recovered. Mild profit-taking pressure has been seen in the dollar index after recent solid gains.
The U.S. dollar index bulls do still have the overall near-term technical advantage as the nine-week-old uptrend remains in place on the daily bar chart. A push and close below solid technical support at the 85.00 level would produce some near-term technical damage and would provide the bears with some fresh downside near-term technical momentum.
For the U.S. dollar index bulls to gains fresh upside near-term technical momentum they will have to push and close prices above strong overhead chart resistance at last week’s high of 88.57, basis March futures.
The key VantagePoint Intermarket Analysis trading tool (www.TraderTech.com) does suggest some more downside corrective price pressure is on the horizon for the March U.S. dollar index in the near term. VantagePoint is a valuable trading tool that employs “Intermarket” analysis to forecast near-term price trends. The U.S. dollar has been one key “outside market” for which many other markets have focused upon for many months. That’s an example of the Intermarket phenomenon that occurs in all markets.
Source: VantagePoint Intermarket Analysis Software (www.TraderTech.com)
See on the VantagePoint daily bar chart for the March dollar index that the Predicted Medium Term Crossover study shows the predicted 4-day exponential moving average has “rolled over” and appears poised to produce a bearish line crossover signal by moving below the predicted 10-day simple moving average.
Predicted Medium Term Crossover is the predicted 4 day exponential moving average of typical prices two days ahead (P4EMA+2) crosses above or below the actual 10 day simple moving average close (A10SMA).
Also note on the daily chart for the March U.S. dollar index that VantagePoint’s Predicted Stochastic indicator is in a bearish posture. The indicator had been above 80.00, which is bearish and has also turned down and produced a bearish line crossover signal, whereby the predicted stochastic line crossed below the “trigger” line of the indicator.
The Predicted Stochastic indicator is based on the position of the close relative to the high or low of the day. During periods of price decreases, the daily closes tend to accumulate near the daily lows. During periods of price increases, the daily closes tend to accumulate near the daily highs. The Predicted Stochastic indicator is an oscillator designed to predict overbought and oversold conditions one day in advance.
Predicted Stochastic (PStoch) predicts a 14-day stochastic oscillator (%K) one day ahead, comparing the market’s current close to its price range over a period of time. Stochastic Trigger (Trigger) predicts a 3-day moving average (%D) of the stochastic oscillator (%K) one day ahead. The
Predicted Stochastic charts the two lines, Predicted Stochastic (%K) and Stochastic Trigger (%D) plotted on a scale ranging from 0 to 100. Readings above 80 predict an overbought condition; readings below 20 predict an oversold condition (thresholds indicated by dashed lines on chart). The
Predicted Stochastic (%K) line is faster and more sensitive than the Stochastic Trigger (%D) line. When the Predicted Stochastic (%K) crosses over the Stochastic Trigger (%D) line in overbought (>80) or oversold (<20) territory, this could be an indication that the market is about to reverse course.
To see more FREE recent market predictions for the U.S. dollar Index go here!
