Greenback Down Against The Major Currencies

DXY. Testing bottom of consolidation range.

The DXY index (77.521) is down overnight with the US Dollar down against all the major currencies.

The index has consolidated in a 77.332 to 78.449 range over the holiday period.

The daily slow stochastics are overbought and have turned lower, suggesting increased potential for a break lower.

Support lies at 77.332 (Dec29 low), 74.17 (Nov26 low), 73.158 (Jul’08 high), 71.314 (Jul’08 low), and then 70.698 (Mar’08 low).

Resistance for the index lies at 78.449 (Dec22 high) and 79.659 (Jul 29 high).

Over the past two months, DXY has correlated most strongly with gold, and then crude oil, the CRB index, and the S&P500 (all negative).

The correlation with the Eurodollar interest rate futures continues to rise but remains less significant.