Wesley Chapel, Florida, July 07, 2008  -- September U.S. Dollar Index futures (DXU8) have recently seen a corrective bounce after prices in early July scored a fresh nine-week low. There also now exists the specter of a potentially bullish double-bottom reversal pattern forming on the daily bar chart for the Dollar Index.

"The U.S. Dollar Index is a basket of several major currencies weighted against the value of the U.S. dollar," said Jim Wyckoff, analyst for www.TradingEducation.com.  Traders should monitor this index closely, as the "greenback" has been a key "outside market" for many other markets for several months. Any bigger price move in the U.S. Dollar Index would very likely have a significant price impact on many other markets.

Strong overhead technical resistance for the September U.S. Dollar Index futures lies at the June high of 74.75. A close above that key resistance level would be significantly bullish to suggest another leg up in prices in the near term. Solid technical support is located at the July low of 72.30. A close below that price level would produce fresh technical damage to suggest a test of the contract low of 71.76, scored in mid-March, or below.

Importantly, by using VantagePoint Intermarket Analysis Software (www.TraderTech.com), a trader can glean very early clues on potential near-term price trend changes or continuation of present trends. These near-term clues provided by VantagePoint can and do give a trader a key edge.

See on the VantagePoint daily bar chart for September U.S. Dollar Index futures that the Predicted 4-day EMA line is still below the Actual 10-day SMA Close line. However, the 4-day EMA has made a solid turn higher, similar to the up-move the 4-day EMA made in late May. At that time in late May the Dollar Index did rally from lower price levels and embark upon a fresh trend higher. That's a very early bullish clue provided by VantagePoint.

Chart Provided by VantagePoint Trading Software (www.TraderTech.com)

Note also that VantagePoint’s Predicted Moving Average Convergence Divergence (PMACD) indicator has just seen the tan PMACD line make a sharp turn higher from lower levels. The last time the PMACD line made a sharp turn north from a lower level was also in mid-May, at which time the Dollar Index started its rally.

Predicted MACD (PMACD) predicts the moving average convergence divergence (MACD) one day ahead. MACD is a trend-following momentum indicator calculated by subtracting a 20-day exponential moving average from a 10-day exponential moving average. MACD Trigger (Trigger) predicts the MACD trigger one day ahead. The MACD trigger is calculated as a 9-day exponential moving average of the MACD.

When the Predicted MACD line crosses below the Trigger line, this predicts a possible reversal of the current uptrend to a new downtrend. When the Predicted MACD line crosses above the Trigger line, this predicts a possible reversal of the current downtrend to a new uptrend. Another crossover indicator occurs when the Predicted MACD crosses above or below the zero line.

Predicted MACD can also be used as an overbought/oversold detector when it pulls away from the Trigger, suggesting the price of the market may be due for a correction that will bring the averages back together. Predicted MACD can also be used to spot underlying strength or weakness when its movement diverges from the movement of prices.

Finally, the Predicted Relative Strength Index (PRSI) indicator overlaid on the daily bar chart for the September U.S. Dollar Index has just made a sharp turn north, and has just climbed out of oversold territory (below the dashed line at 30.00). The last time the PRSI was in a similar posture was again in mid-May, at which time the Dollar Index did post a solid price rally.

As its name implies, the Predicted Relative Strength Index is a momentum indicator that calculates a market’s strength or weakness by comparing recent price gains to price losses.

Predicted RSI (PRSI) predicts the 14-day relative strength index (RSI) one day ahead.

The Predicted RSI compares an average of up closes to an average of down closes for a specified period to predict a market’s strength or weakness one day ahead. The Predicted RSI is plotted on a scale of 0 to 100. Readings above 70 predict an overbought market; readings below 30 predict an oversold market (thresholds indicated by dashed lines on chart). Predictions above 70 or below 30 suggest that the market may be making a top or bottom in the next day.

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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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