Dollar Index Ignores Bernanke's Remarks

NEW YORK (TheStreet) -- Overall, most of the major pairs swung around the highs touched during the Asian session.

However, during the second part of the U.S. session, Mr. Bernanke's speech had a strong influence on the currency market, temporarily strengthening the dollar. The move had no follow-through and the market retraced every pip that the dollar gained during spike created by the head of the Federal Reserve.

Interestingly, the dollar continued to decline even though Bernanke made his first comments in a long period about the strength of the dollar. "Our commitment to our dual objectives, together with the underlying strengths of the U.S. economy, will help ensure that the dollar is strong and a source of global financial stability," he said. The market went on to ignore the central banker, sending the dollar index below the critical 75.00 support area.

The dollar index replaced the gold standard, and since inception 36 years ago reflects a value of 75.00, which equates to $1 in 1973 being worth 75% of that value in real terms now.

For the Dollar Index Technical View, click here.

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.