US Dollar Index Forecast December 7, 2012, Technical Analysis

The US Dollar Index rose during the session on Thursday as we broke back above the 80 handle. We closed the very highs of the session, and this always is very bullish. However, we are still waiting to get above the 80.50 level to believe in the breakout and support that we have seen over the last couple sessions.

It really isn’t until we get below the 79 level that we feel comfortable selling this market, as we see a ton of support between here and there. Looking at this chart, we think if we can get above 80.50, we could go much higher. This will more than likely be predicated upon negative news about the so-called fiscal cliff, and could be a knee-jerk reaction but violent and its ferocity. If we managed to break down below 79, we think this market comes completely apart.