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The US Dollar Index had a fairly week day most of the session, but bounced off of the 79 handle in order to form a hammer. If you have been listening to our forecast, you know that we had been waiting for a move below 79 in order to short the contract. However, we did not get the appropriate close, and it now looks like this market is going to find quite a bit of support in this general vicinity.
Nonetheless, we are a bit leery of going long the US dollar at the moment until we get above the 80.25 resistance zone. It is at that point time that we feel this market will break to the upside with significant strength. In the meantime, we suggest that it is simply a consolidated market between 79 and 80.25. Obviously, if we break well below the 79 handle, we would have to start selling.