Euro Plunges, Dollar Index Bounces

Overall, the dollar index managed to bounce from just under the 76.00 area, the lowest value touched over the last 15-months of trade, as equity and oil trade found sellers. The dollar index managed to strengthen across the board during the day, posting important gains, especially against the euro and the aussie, which plunged at a very strong pace throughout the European and U.S. sessions.

As long as the equity markets remain in the red, the dollar index is set to continue the current uptrend.

Dollar Index Technical View: TheLFB Member Charts

Daily Chart Trend: Short. Main price points: 74.00, and 75.00. Looking for: Wave C)

Prices on the dollar index have reversed over the past week around the black resistance line, influenced by a higher stock market. Currently the market is threatening the yearly lows, where a break-out will push prices lower. This is shown in the blue wave V), of an extended red wave V leg, of larger C), which may find the lows somewhere around the 74.00 area.

The euro (Eur/Usd 1.4840) is currently trading below support (1.4850), after it tumbled 150 pips during the day. With this decline, the euro is trading once again below the 20-day moving average, which has been an important swing point lately. To the downside, the next important support area is in the 1.4750 area, next to the 50-day moving average.

The pound (Gbp/Usd 1.6580) had a daily range of only 90-pips in Thursday trade, far below the average of the last few weeks of trading. This happened as the pound traded just above the 20-day moving average, and at the same time above a support trend line, which has been holding the market for almost a month.