The Eygpt matter brought oil to new high and the currencies changed greatly as well. USD kept on dropping, leading the other currencies to higher levels. Aussie rose above 1.0 and is heading to the high in December 2010. Though Reserve Bank of Australia remained the interest rate unchanged (at 4.75%), this appears to be an attractive rate to investors, especially when the atmosphere for stock markets isn't that good.
Let's see the daily chart of US Dollar Index.
The green line is basically the bottom line for the index. This is a very strong support and indeed if the price breaks it, I couldn't imagine how low DXY could fall to.
We can see that DXY formed three peaks from mid of Q4 2010 to Q1 2011. Though the levels were not too near, I would still treat it as triple tops.
The thick blue line represents the "neckline". Obviously the index broke it in early Q1. This accounts for the slump of DXY. The estimation given by the triple top suggests that the index would drop until 76, which aligns with the support level by the green line.
We could expect that US Dollar will keep on dropping while other currencies gain. 76 will be the next support, this is a critical support and is likely to successfully prevent the index from further retreat.
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