The present technical posture of the USDX is weak, both from a near-term and longer-term perspective. The index hit a fresh all-time low late last year, at 74.68, basis March futures. That price level is now very strong longer-term technical support. A drop below that key support level would produce more serious longer-term chart damage to suggest another leg down in the dollar index in the coming weeks.

At the same time, a move in USDX futures back above solid longer-term technical resistance at the 78.00 level, basis March futures, would provide the bulls with some fresh technical evidence to begin to build a case that a longer-term market low could finally be in place.

"Importantly, however, the USDX had recently become overdone on the downside and was due for a significant corrective bounce at some point," said Darrell Jobman analyst for www.Tradingeducation.com The key for traders was finding a way to better determine when that corrective bounce would occur. Having a better idea of when a corrective price bounce or price pullback in a trending market will occur gives a trader the option of exiting a trading position and taking profits beforehand, or even entering a new trading position, expecting the price correction soon.

Using VantagePoint Intermarket Analysis Software (www.TraderTech.com), one could see in late January the downtrending short-term difference and long-term difference lines that were in a bearish mode, suggesting the longer-term trend of the USDX remains down. However, note that in late January VantagePoint’s Predicted Neural Index moved to 1.0, a bullish indicator. Indeed, price action during the first few trading days of February did show the USDX making a solid corrective bounce in a bear market.

The Predicted Neural Index (PIndex), a proprietary indicator, predicts whether or not a three-day simple moving average of the typical price will be higher or lower two days in the future than it is today. The Predicted Neural Index compares two three-day moving averages to one another – today’s actual three-day moving average with a predicted three-day moving average derived from intermarket analysis data.

When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is "1.00," indicating that the market is expected to move higher over the next two days. That type of information can be very helpful in establishing short-term positions in forex and other markets ahead of moves such as Tuesday’s strong rise in the USDX.

The Predicted Neural Index is either correct or incorrect so its performance can be measured in terms of percent correct to produce the accuracy statistics cited for VantagePoint, which has a predictive accuracy rate of around 80%* across a wide range of markets and time spans in ongoing research.

About TradingEducation.com, LLC
Established in September 2005, TradingEducation.com, LLC (www.TradingEducation.com) has developed into a comprehensive internet resource offering traders free educational materials, quotes, and market relevant news for stocks, exchange-traded funds, commodities, currencies, futures and options. Traders from all experience levels can benefit from the wealth of information and tools available at TradingEducation.com which seeks to enhance their trading strategies and avoid costly mistakes. All information on TradingEducation.com, LLC websites is free to the public, with operational initiatives supported solely by advertisers.

About Market Technologies, LLC
Headquartered in Tampa Bay since its founding in 1979 by Louis B. Mendelsohn, with trading software customers in over 90 countries worldwide, Market Technologies is a fast growing, Inc. 500, company and recognized world leader in market forecasting. Market Technologies researches and develops proprietary trend forecasting and market timing technologies that utilize artificial intelligence applied to intermarket and hurricaneomic analysis, in order to forecast various commodity and financial markets throughout the world. These presently include, but are not limited to, stocks, stock indexes, ETFs, energies, interest rates, currencies, metals, grains, meats, softs and Forex, covering over 600 world markets. www.TraderTech.com

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