USDX Dollar Index Update

• The USDX has penetrated both the recent range highs at  80.72 from 14/12/11 and the 50% Fib retrace of 88.7 – 72.69 as the GBP/USD, heavily dollar index weighted EUR/USD and USD/CHF have seen sharp losses on dollar strength over the past two days.
• This comes after the trend line consolidation area breakout yesterday.  Price action at these extremities is key now as the year draws to a close with potential for a breakout scenario or the formation of a range high on any failure to progress beyond the 80.72 area. 
• The 79.69 previous resistance becomes support level is still seen as a potential near term base with only two significant moves through this level  as can be seen on the attached chart – one of them only on an intra day basis on the 21/12/11. 
• The USDX is currently up 2.87% on the monthly basis and 0.72% over this week.   

Dollar Index Daily Chart