The US Dollar Index, an average of the currency’s value against six top counterparts, closed below key support marked by a rising trend line established from major lows in mid-July 2008 as stock markets advanced on better-than-expected US housing market data. The long-term fundamental outlook continues to favor Dollar strength, with economic growth forecasts calling for US economic growth to outpace that of most of its major counterparts going into the second half of 2009, suggesting US interest rates will reverse higher faster than elsewhere and drive demand for the greenback. In the meantime, however, the breach of the key technical level argues for a protracted correction lower. We will move to the sidelines, closing out all remaining US Dollar exposure, booking 491 pips in losses on our GBPUSD and NZDUSD shorts but locking in 2108 pips in profit on EURUSD for a net [B][U]1617 pip profit[/U][/B].
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