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US Dollar Index: Weakens, Sets Up For The 72.69 Level.

US Dollar Index: The Index remains bearish following through lower on the back of its Thursday losses during Friday trading session.

This development has put the Index on another week of losses and opened the door for additional weakness towards the 72.69 level, its 2011 low.

A cut through that level will target the 71.509 level, its July 2008 low and subsequently its 2008 low at 70.79. Its daily and weekly RSI are bearish and pointing lower suggesting further weakness.

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Alternatively, on any recovery, the 74.22 level, its Jun 2011 low will be targeted with a violation of that level allowing for more gains towards the 75.81 level, its April 18’2011 high. A halt is likely at that level if tested.

All in all, the Index remains weak and vulnerable as it looks to decline further towards the 72.69 level.

EURUSD: Strengthens, Closes In On The 1.4938 Level.

EURUSD: A strong rally at the end of week saw the pair cutting through its May 09’2011 high at 1.4441 to close higher for a third week in a row since turning off the 1.3970 level, its May 23’2011 high.

This development has put EUR on the path to the 1.4938 level, its 2011 high where a sustained break will resume its long term uptrend and clear the way for further strength towards the 1.5140 level, its 2009 high. Its weekly studies are bullish and pointing higher supporting its current bullish tone.

Alternatively, on any pullback, initial support stands at its May 09’2011 high at 1.4441 where a reversal of roles as support is likely to occur and turn the pair back up.

However, a loss of that level will open the door for more declines towards the 1.4345 level, its May 20’2011 high with the big risk being a return below the 1.3970 level, its May 23’2011 low.