US Dollar Index forecast for the week of December 17, 2012, Technical Analysis

The US Dollar Index fell during most of the week over the last five sessions as the 80 handle failed to hold price up. However, we see a significant amount of support between here and 79, and as such need to see 79 give ways in order for us to start shorting aggressively. If we managed to break down below the 78 handle, we would become aggressively short and start adding to the trade rapidly.

One interesting note though is the fact that we did not managed to break down below the lows of the hammer from last week. This suggests that there is quite a bit of support in this general vicinity, and as such we will have to tread lightly. We will use it least a daily close is below our levels to start selling.