The dollar is at a key point here that could have implications on the market. Last week there was the potential for the dollar to decline another 3% if it could break its bear flag. It did but was able to bounce and climb back up to 80, now this pattern is voided. But the dollar remains at a cross road here. There is a move into the dollar as once again the Greece is broke the Euro stinks news is back.
DX Nearing Long-term Downtrend Line: It is currently sitting right next to its long-term downtrend from the start of the summer. A break of this trend would signal the short-term up trend has no overtake the downtrend and the dollar should head higher. But trendlines need to be taken with a grain of salt since there can so many variaitons. That is why we need to look at resistance and supports levels as well and the dollar is near a key resistance level and very close to breaking it.
DX at Resistance Levels: The last rally for DX head it get to 80.26 on a swing high but the bulk to that rally was contained below 80.07. Now DX is right at this level which coincides with the long-term trend line. A break above 80.07 would be bullish for the dollar and bearish for the market.
