US Dollar Index Forecast December 5, 2012, Technical Analysis

The US Dollar Index fell through the 80 handle during the session on Tuesday, signaling further Dollar weakness to come. We think based upon the fact that the candle closed the very lows of the session, this market will indeed test the 79 handle for support. Whether or not we can get through may be different question, but we certainly think that dollar weakness is going to be featured in the Forex markets over the next couple of sessions.

This being said, we would initiate short positions on a break of the 79 handle, and if you are more inclined to trade the short-term charts, you probably can do it here. As for buying, we need to overcome the 80.50 level, or the Thursday shooting star highs.