A negative day for the dollar index yesterday which ended the trading session with a relatively wide spread down candle which breached the 9 and 14 day moving averages as a result. The move lower came as little surprise given the the series of shooting star candles which have appeared on the daily chart for the past two weeks and these are now suggesting that we could see a pull back from the recent rally which has seen the index recover strongly since the lows of late December 2009. With all three moving averages now generally point higher and with the 200 day average sitting sell below the medium term outlook for the index, and the US dollar, still remains positive but for a continuation of the recent bullish sentiment we need to see a clear break and hold above the 81 price handle which would then signal that the positive momentum has returned and provide us with a firm base below.
