The U.S. Dollar Index is the most important confirmation chart I use…and I use it to gauge what the EUR/USD, USD/CHF, GBP/USD, and USD/JPY are most likely to do.  Don’t forget that "comm dolls" like the USD/CAD, AUD/USD, and NZD/USD have correlation to the Dollar as well…even though we look at these as split personality pairs because of they are "commodity currencies".

Even though the U.S. Dollar is a future contract there is too much correlation between the major pairs and the Dollar Index to ignore this key chart. Plus I really feel that ALL forex pairs are, to a degree, "commodity currencies" when you understand the correlation between the pairs and the Dollar and the Dollar and market like crude oil and gold.

So with that in mind, the Dollar is bouncing around in a range between73.80 to the upside and 71.80 to the downside.  These are both minor psychological levels.

If this chart continues to bounce in the range, then daily charts are not going to find a lot of room to run on breakouts.  I’m watching this range closely.  For intraday chart traders (I watch the 15, 30, 60, 180, 240) the range should not present too much of an issue.

- Raghee