![\"usdx](\"http:\/\/www.laidtrades.com\/wp-content\/uploads\/2010\/06\/061510usdx.png\")
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Here\u2019s a look on the daily time frame of the US dollar index (USDX). In case you do not know, the USDX is a measure of the greenback\u2019s value against a basket of several other major currencies. These currencies are made up of the geometric mean of the following: euro (57.6%), Japanese yen (13.6%), Sterling pound (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%), and the Swiss franc (3.6%). Anyway, as you can see from its chart, the index has been on a positive tear after bottoming out at 74.170 back in November 25, 2009. It has gone past 88.50 when it broke out from an ascending triwngle pattern last week bu it has declined and weakened since then. Presently, the index is hovering around the high that was marked last April 2009 and the medium term uptrend line that drew in the chart. If this level holds, it could aim for the high at 2009 again at 89.50. But if the index fell below the mentioned supports, it could fall further until it finds some lift at the longer term uptrend line.<\/p>\n
Sentimentally, the USD has been gaining favor over the other major currencies due to the ongoing risk aversion in the global markets particularly in Europe. The euro has been losing a lot of support as of late because of the fiscal crisis, which started in Greece, that is now spreading across the region. And since bulk of the index\u2019s weight is composed of the euro (57.5%), a decline normally translates to a rise in the index. The USD sustained it losing streak this Monday when the euro zone\u2019s industrial production for April surpassed the market’s 0.7% forecast with a 0.8% gain. The accounts March number was also positively revised to 1.5% from 1.3%. The growth in the European industrial production added signs that the global economic rally is gaining momentum.<\/p>\n
Still, with majority of the EU-member countries hampered with debt. The market\u2019s sentiment could eventually turn bearish. Until Greece and the other countries reduce their deficit back to 3% of their GDP (Greece currently has 12%) and they service their debts promptly, only then could the euro\u2019s rebound be fully warranted. Doing so, however, would be difficulty and would take time.<\/p>\n