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The US Dollar Index fell during the session on Friday as the quantitative easing effects on the US dollar continue. We did get a little bit of a bounce off of the 78.50 level however, so a small relief rally could happen. We think that a daily close below the 78.50 level would signify another selling opportunity though, and we certainly think the rallies could be sold at this point.
Above, we see resistance at the 80 handle, the 80.50 handle, and certainly at the 81 handle. Looking at this chart, it's easy to say that things are overextended to the downside. However, with the new levels of quantitative easing out there, it is hard think that the dollar will continue to gain unless there is some type of meltdown in Europe.