The U.S. Dollar Index has had a water fall decline since June 7th when it tagged a major descending trend line resistance level at $88.70. Since that high the U.S. Dollar Index has declined by nearly 10.0 percent. This is the same percentage that the major stock indexes such as the S&P 500 Index and the Nasdaq 100 are higher by. Remember when the dollar declines the major stock market indexes seem to inflate higher. If you look at a chart of the U.S. Dollar Index compared to the S&P 500 Index you will notice that the two indexes trade inverse to each other. Therefore, should the dollar bounce it is very likely that the major stock indexes pullback or come under some pressure and deflate. The U.S. Dollar Index will have strong support around the $80.00 - $79.00 area. The U.S. Dollar Index can be traded by using the Powershares DB U.S. Dollar Index Bullish (NYSE:UUP). For traders that want to play the downside action in the dollar they can trade the Powershares DB U.S. Dollar Index Bearish (NYSE:UDN).
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