US Dollar Index Forecast December 10, 2012, Technical Analysis

The US Dollar Index rose during the majority of the session on Friday but was turned around at the 81 handle in order to fall and form a shooting star. The shooting star is essentially focused around the 80.50 level, and as a result it looks like we’re going to see continued pressure on the US dollar overall.

This could change based upon headlines involving the so-called “fiscal cliff” in the United States, so having said that it is going to be a very active contract over the next week or two we believe. However, as we get later in the year, it is likely that the volumes will dry up as we enter the holidays. With this being said, we still believe that there is a bit of a downward bias in this market, but we really don’t think that we will see a break below 79.50 anytime soon. As far as buying is concerned, if we get above the 81.50 level, we think this market can go much, much higher.