The US Dollar Index has managed to stabilize as equity markets finally put in an overdue distribution day. The S&P and Dow Jones Industrial Average both broke below rising wedge support on Tuesday on stronger volume to possibly hint of a short-term correction. Meanwhile, the DXY continues to consolidate near the December 2008 low, but remains well below key moving averages (10 & 20-day MA's). 4-hourly studies suggest temporary basing, but will require a move above 77.85 (Tuesday's high) to confirm a near-term double bottom. Below this week's lows at 77.43/45 could trigger a panic sell-off towards 75.00/76.00 (near 78.6% retrace/Q3 2008 base). If equity markets continue to correct, however, the Greenback should receive a well-deserved boost and revisit last week's pivot (78.22/30).
